Discuss the evolution of a distribution
strategy
Determine the factors to consider in
distribution strategy
Distinguish the different types of distribution
channels
Explain the different patterns of distribution
CORPORATE
STRATEGY
MARKETING
STRATEGY
DISTRIBUTION
STRATEGY
CUSTOMER SERVICE LEVELS
DISTRIBUTION OBJECTIVES
SET OF ACTIVITIES
DISTRIBUTION ORGANIZATION
POLICY AND PROCEDURE
KEY PERFORMANCE INDICATORS (KPIs)
CRITICAL SUCCESS FACTORS (CSFs)
NATURE OF THE INDUSTRY
PRODUCTS AND SERVICES
NATURE OF COMPETITION
AFFORDABILITY
CATEGORY A- highest contribution
CATEGORY B
CATEGORY C- lowest contribution
What is expected out of the network in
ensuring the desired service levels
Time
Place
Possession
Period of credit
Defines the manner in which the company and
its channel go about actioning the objectives
Periodic sales forecasts
Dispatch arrangements
Beat plans for market coverage
Journey and beat plans for service engineers
Market visits
Collection
Promos
Sales calls esp. for category A
Who will do what?
Own sales team vs. outsourcing
Selecting the channel partners
What is expected of the sales personnel?
Policy and implementation guidelines
Operating Manual
Include :
Redressal of complaints
Settling disputes
Additional payments
Coverage of institutional and service levels
To measure effectiveness of the
strategy
Clear, transparent and unambiguous
Serous commitment
Fair dealing
Clear defined customer service policy
High levels of integrity
Equitable distribution in times o shortage
Prompt compensation to channel partners n
special promotional activities
A GROUP OF PEOPLE AND FIRMS
INVOLVED IN THE TRANSFER OF TITLE OR
OWNERSHIP AS THE PRODUCTS MOVES
FROM THE PRODUCER TO THE CONSUMER
INTERMEDIARIES OR MIDDLEMEN
BETWEEN THE PRODUCER AND THE
CONSUMER
SALES CHANNEL
motivating buyers, sharing information and
negotiating fair bargains
distributors
DELIVERY CHANNEL
Physical transactions
C&FA
SERVICE CHANNEL
After sales service
Company owned distribution centers (DCs)
Carrying and Forwarding Agents (C&Fs)
Consignment Selling Agents (CSAs)
Distributors, stockists, value added resellers
and agents
Wholesalers
Retailers
Industrial products– own sales force and
marketing team
Also known as facilitators
Basically transporters
Collects product from the company plant and
store them in a central location for breaking
bulk and dispatching to distributors
CSAs also sell goods to the market
Company outsourcing of distribution of
products
Invest in the products except agents
On commission, margin or mar-ups
May or may not get credit from company
Distributors- redistribute
Stockists- invest but company sells
Agents- only use their contacts
Deal with large number of companies
Own shop in busy trading areas
They choose and decide what products they
will sell
Not in contract with the company
Customers are other wholesalers, retailers
and institutions
They extend credit terms to their customers
Shopkeepers
Value added resellers- buys incomplete
product or kit and sell assembled ones
Computers, bicycles
INTENSIVE
SELECTIVE
EXCLUSIVE
PRODUCTS ARE MADE AVAILABLE
IN AS MANY OUTLETS AS
POSSIBLE
ONLY A FEW SELECT OUTLETS
IN LINE WITH ITS IMAGE AND VALUE
JEWELRY
SIGNATURE ITEMS
ONLY ONE OUTLET IN A MARKET
COMPANY OWNED
PRODUCT PRODUCT
AGENT
INDUSTRIAL
DISTRIBUTOR INDUSTRIAL
DISTRIBUTOR
INDUSTRIAL INDUSTRIAL
CUSTOMER CUSTOMER
PRODUCER
PRODUCER
DISTRIBUTOR
RETAILER
RETAILER
CUSTOMER CUSTOMER
PRODUCER
DISTRIBUTOR
WHOLESALER
RETAILER
CUSTOMER
1. Why are distribution channels required?
2. Explain the functions of intermediaries.
3. Differentiate distribution center,
distributors, wholesalers and retailers
4. Draw up a distribution strategy for a
company who makes electrical equipment.