Distribution Strategies and Channels Explained
Distribution Strategies and Channels Explained
Marketing
According to Robert, it is the action of making commercial.
According to Mansillon et al (1984), these are all the business activities of a company.
from the invention of the product to its destruction by the consumer or the end user
A study, a strategy
APPLIED STUDIES
Statistical analysis
APPLIED ACTIONS
A strategy, an action....
Company
Direct marketing
Target
Force
for sale
link + or - discreet
apparent lien
Market adjustment
[see page 11 of the file (diagram: The Marketing Approach (IMN model)]
Knowing is not enough, one must understand the market. There is a process:
Market understanding
. Process the data to make it usable.
. Search for correlations (for example: between the attendance at a location
sale and C.S.P...
Proposals for adapting the offer to needs, setting prices, proposal for
communication policy, distribution organization...
Integration
That is to say, the hinge between marketing choices and the policy to be pursued... (Policy
general)
. segmentation
. targeting
. the positioning (mapping)
it is the space left in the consumer's mind
. the commercial policy for each segment
. The distribution policy
Use of intermediaries
The Multichannel:
Force of
sale
Centres
of call
Mail Agency
Internet
Audiotel mailing
I- the distribution circuits
1. Distribution channels
KOTLER, DUBOIS: Every producer seeks to establish a system that allows them
to reach its market. The different intermediaries make up the circuits or channels of
distribution.
COLIN, PACHE: Distribution circuits are the means of transporting a good from
producer to the final consumer. It can integrate different intermediaries.
THE CIRCUIT It is the path from the producer to the customer (from producer to final customer it is a
circuit
Example: Producer
Hardware functions
. The distributor takes the initiative to sell the product. But he takes the risk.
that product cannot be bought.
. La réalisation de l’assortiment : le distributeur va proposer des produits qui
are adapted to the needs of customers (site marketing = local adaptation)
. The services provided to the consumer:
information about the products (you will be able to find such and such stores, there will be
sold in such or such way, the characteristics of the product
the credits
SAV
Distribution flows:
. Ownership flow (until we buy, it is the distributor who is)
owner, then it’s us.)
. Physical flow (from producer to customer)
. Financial flow (we buy a product in cash, checks, credit card)
. Flow of information (information about the customer, from distributor to producer...)
Consequences that justify the existence of intermediaries:
. The multiplication of contacts (creating opportunities to meet in order to create
occasions to consume
. Economies of scale (fixed costs are spread over large volumes)
important
. Reduction of operating ideas
. Best assortment in line with consumer needs
. Best service
The concept of a long circuit: when there are at least four independent levels
Producer or importer
sales agents
reseller
Intermediate retail level (retailer)
Final consumer
Producer
Consumer
According to Y CHRIOUZE: The distribution
Concept of short circuit: There is only one intermediary (the retailer, who is a
isolated independent
Producer or importer
Final consumer
Direct selling:
We have a short circuit if the company is not a producer of the marketed products.
In the opposite case, it would be an ultra-short circuit.
Producer
End consumer
producer
Final consumer
Integrated short circuits:
Producer
Final consumer
Granting producer
Dealer distributor
Final consumer
or
Franchisor producer
Franchised retailer
Final consumer
Short supply chains:
Producer
Final consumer
==> A direct circuit: In this type of circuit, no intermediary takes the title of
ownership of the goods (we are in the ultra short)
Small aside: it also helps to determine who is the owner of the goods at a
given moment. For example: we are on the platform, merchandise falls from a crate, which is
responsible ???
These are organized channels. We have one or more members who have supremacy in the
channel, they have power, they are in a position of strength.
==> The contractual channels:
Integrated channels:
A member of the channel chooses to implement an upstream integration strategy (e.g. up to the
manufacturing plants) or downstream integration (e.g. having its own network)
The advantage of integrated channels is to master all the steps that can go up to the
final distribution.
II- Process of choosing a circuit
II.1. The determination of possible solutions
A/ The background to the choice of a distribution channel
The characteristics of buyers: one must be able to find the product where one wants it.
We will identify the possible meeting points between the consumer and the
product.
Consumption at home
coca cola
food distributor
(branches, GMS)
Consumer on site
work, passing through
distributors (cinemas,
company...)
Coca Cola
Consumption during
Consumption during meals movement
homeless service station
collective catering restau-route
-restaurants railway restaurant
cafeterias aerial restaurant
fast food
starting from the product
Commonly purchased products: these are products that are routinely bought (e.g.:
the bread, canned goods for students, the light bulbs). For these products, we are looking for a
maximum market coverage.
Common purchase products correspond to basic products: soap, drinks, aspirin.
What is important for these products is customer loyalty ==> pre-sold products, the
packaging does it all.
Impulse products: candies, flowers, chocolates, ... CDs and DVDs for 1 €
Emergency products: umbrella, they must be widely available and should not be lost.
sales opportunities.
The products of considered purchasing: the shopping goods: the consumer compares according to their criteria.
Clients are willing to invest time. The price is generally high, and the frequency
the purchase is easier than in the previous case. There is selective coverage, one does not find
not the product everywhere.
Unwanted products: these are products that the consumer does not know about, or
So these are products that he knows but for which he has no spontaneous buying interest.
(ex: life insurance).
Unrequested products require cooperation from the intermediary because one cannot
Selling this on your own requires the intermediary to take an active approach ==> the distributor
If quantitative objectives: it is about covering the market as much as possible, hence multiple channels
Decrease in costs of
logistique commerciale
Productivity effort of
distributors
What impact does a change in the existing distribution method have on sales?
other products in the range => exist on the sale of other products in the range?
C/ The level of control exercised over the circuit
Approved concession/distribution
The authorized distributor: the reseller can invoke a recognized competence by the
manufacturer, as part of a contract.
% distributor margin:
outside
inside
MD = MD / 1 + MD
MD = MD / 1 - MD
The revenue outlook is not the same depending on the distribution channels; we calculate the
profitability rate of each circuit:
TR = CA - Distribution cost
distribution cost
Wholesaler/Retailers
independent/integrated commerce
Agree or not to go through centralizing organizations for the HA and the sale of
products
Other criteria:
Retailers
A retailer orders from a wholesaler, this wholesaler lists
all the requests from the retailer and place an order for
large. The wholesaler centralizes the HAs, it is the intermediary between
the manufacturers and the retailers (e.g. Spar)
In-store sales:
traditional selling/ with seller:
It is a classic sales method characterized by a direct exchange between buyer and seller.
seller. It's personalized selling, the seller is almost more important than the product
=> advice, touch-ups, etc. This is suitable for the purchase of anomalous goods (clothing, goods
household equipment, luxury food), these anomalous goods require
professionalism and advice. If we are in ordinary goods (pasta...), we will rather use the free market.
Service while the more we enter anomalous products, the more advice is needed.
The seller will gain the buyer's trust.
Self-service/without sales assistant:
The causes of the development of self-service (LS):
5 major causes:
the phenomenon of urbanization
the development of the car fleet
the increase in purchasing power
always more consumption therefore expansion of the offer
the rise of female work => previously supplementary, additional work
the increase in time allocated to leisure and reduction of time dedicated to shopping
Self-service developed in France especially after the 2andworld war, starting from
1948. Boulet Turpin 1erstore in LS in Paris and casino similar in Saint Etienne.
about 112 department stores in France (177 in 2003 and 148 in 2000)
7434 m² of sales area (increasing)
The average number of employees is increasing, just over 200 employees per.
magasins, total = 24752
- 273 popular stores, with an average sales area of 1776 m² per store,
55 employees per store on average, total number of 15,000.
Local commerce:
Their surface area is less than 120 m², they are small self-service stores (PLS) Small self-service
Area less than 120 m²
In this category are convenience stores, which sell emergency products.
Service stations can be classified in this category, like in the USA (store).
The convenience store is a PLS of 120 to 400 m², mostly food.
Supermarkets with an area of less than 1200 m² = max discount store are PLS.
A few numbers:
Regarding the Atlantic Coop, there are Champion stores that belong to
- the Alsace coop: maxi supermarket, the mutant
Cora, it's the PLS, match
Francap coccimarket and ladybug
super U: U Market, Useful,
Maxi discount name: in a Lidl 653 m² on average and 107 parking spaces in
average, ramp made up of 5 boxes in general
When a survey was conducted, 70% of French households reported that they frequent
regularly maxi disconnectors
Some social data: The large discount stores employ 33,300 employees, 92% of
effectifs ont un CDI, l’effectif est à 70 % féminin 78% workers, 17% agents
of management, 5% of executives
Lidl, Aldi, the mutant, Netto of 600 m² thrive near hypermarkets and neighborhoods
of residence.
SUPERMARKETS:
In 2005 9315 supermarkets from 400 to 2500 m² (in 1990 => 6400), generated 66.1
Billions of euros in revenue.
General characteristics:
Employees, workers 78 %
Master agents 8%
Frames 14 %
Some statistics:
Hypermarkets
Leclerc 408
Carrefour 216
Auchan 124
Giant 110
Cora 57
Hyper U
Roundabout 6
Supermarkets
Intermarché 1660
Champion 1047
Super U 574
Casino 402
Attack 332
Monoprix 212
Match 147
Leclerc 100
Prisunic 49
Maxicoop 38
Small supermarkets
Shopi 600
Franprix 448
The large international groups:
Home selling:
The sale through private meetings, representatives of a company will encourage the organization
from a meeting at the home of a hostess, who invites their friends, neighbors...
There is a network of dealers
More than a million meetings each year
The conventional network sales, with an exclusive representative, has a national sales director.
We have regional directors, departmental directors, and area managers.
Sales by delegate/ delegation, mainly used for products whose cost of
the production/ cost price is low (cosmetics and cleaning products), we use
so people who work part-time or occasionally (women who sell to
their relatives, areas close to their homes
Critiques:
Home selling does not comply with the competition law of commerce, it is a method of
aggressive selling, some salespeople present themselves to customers as pollsters
of opinions, there is often a promise of gifts, influence on the guest's decision by
the influence of the group.
Examen ; 2 thèmes au choix, maximum 1,5 copie double
The themes are the main chapters... under main chapters
III- 4. The major changes in distribution from 1850 to the present day