Dimensions of Marketing Strategy: Distribution Strategy · Dimensions of Marketing Strategy: Distribution Strategy ... least expensive for heavy commodities, ... Dimensions of Marketing

Dimensions of Marketing Strategy:Distribution Strategy

Pages 402-408 in your textbook

Alicia Savino

What To Expect

Marketing Channels• What paths do products take to get to

customers?

Intensity of Market Coverage• How widely do you distribute products?

Physical Distribution• What activities move products to customers?

Marketing Channels

A Marketing channel is the middleman that moves products from the producer to the consumer.

Retailers- Buy products from manufacturers and sell to consumers for household use, not for resale.

Wholesalers- Buy products from producers or other wholesalers to sell to retailers.

Supply Chain Management

• Long term partnerships among marketing channel members who work together to reduce costs and make decisions to conveniently move products from supplier to manufacturer to wholesaler to retailer to consumer to satisfy customers

• Creates alliances between channel members

Channels for Consumer Products• Channel A: Producer to Consumer

Farmers selling fruit to consumer

• Channel B: Producer to retailer to consumer

College textbooks, automobiles

• Channel C: Producer, wholesaler, retailer, to consumer

Televisions, clocks, watches

• Channel D:Producer, agent, wholesaler, retailer, consumer

Convenience products, Candy

Activity

Channels for Business Products•More than half of business products are sold through direct marketing channels•Business customers like to communicate directly with producers to gain technical assistance and assurance

Intensity of Market Coverage

How widely to distribute a product-how many and which outlets should carry the product?

Intrinsic distribution• Makes product available in as many outlets as possible

Selective distribution• Small number of outlets used to expose product

Exclusive distribution• Gives one outlet the sole right to sell the product in a

geographic area

Physical Distribution

Physical Distribution includes all activities relating to moving products to customers.

Transportation• Railways: least expensive for heavy commodities,

food, raw materials, and coals• Motor vehicles: greater flexibility to reach locations;

door-to-door service• Inland Waterways: agricultural and industrial products• Pipelines: petroleum, natural gas, wood chips,

chemicals• Airways: speed and high dependability, most

expensive means of transportation

Warehousing

• The design and operation of how facilities receive, store, and ship products

• Companies often own and operate their own, some rent

• Important so products are available for shipment to different geographic locations

Materials Handling

• Physical handling of products in warehousing and transportation

• Efficiency improves customer service

Importance and Homework

Distribution Strategy can make or break your product and/or business.

Use your knowledge from today to complete the assignment being handed

out by the beginning of next class period.

Have a great day!