DISTRIBUTION CHANNELS & DISTRIBUTION

STRATEGIES

ByAshish Barapatre(13034)

WHAT IS DISTRIBUTION ?

Distribution is the process of making a product or service

available for use or consumption by a consumer or business

user, using direct means, or using indirect means with

intermediaries.

WHAT IS DISTRIBUTION CHANNEL?

• A distribution channel is the chain of individuals and organizations

involved in getting a product or service from the producer to the

consumer. Distribution channels are also known as marketing

channels or marketing distribution channels. 

CHANNELS OF DISTRIBUTION

MANUFACTURER/PRODUCER

Entity that makes a good through a process involving raw materials, components,

or assemblies, usually on a large-scale with different operations divided among

differentworkers. Commonly used interchangeably with producer.

DISTRIBUTORDistributors frequently have a business relationship with manufactures that they

represent.

Many distributors maintain exclusive buying agreements that limit the number of

participants or enables distributors to cover a certain territory.

The distributor becomes the manufacture’s direct point of contact for prospective buyers

of certain products. However, distributors rarely sell a manufacture’s goods directly to

consumers.

Wholesale representatives and retailers generally find distributors to buy products for

resale.

 Individuals or businesses that purchase the right to sell ABC Corp.'s products but not the

right to use ABC's trade name

WHOLE SELLER

A wholesaler is an intermediary entity in the distribution

channel that buys in bulk and sells to resellers rather than to

consumers.

 A distributor performs a similar role but often provides more

complex services.

Distributors and wholesalers often work together as channel

partners. 

RETAILERS

 A Retailer purchases goods or products in large quantities from manufacturers directly or

through a wholesale, and

Retailers consist of small and large for-profit businesses that sell products directly to

consumers. To realize a profit, retailers search for products that coincide with their

business objectives and find suppliers with the most competitive pricing.

Generally, a retailer can buy small quantities of an item from a distributor or a wholesaler.

For instance, a retail merchant who wanted to purchase a dozen lamps could contact

lighting distributors to inquire about pricing. Then sells smaller quantities to the consumer

for a profit.

PUSH AND PULL STRATEGY

PUSH STRATEGY A push promotional strategy involves taking the product directly to the customer via whatever means, ensuring the customer is aware of your brand at the point of purchase.

"Taking the product to the customer"

EXAMPLES OF PUSH TACTICS

Trade show promotions to encourage retailer demand

Direct selling to customers in showrooms or face to face

Negotiation with retailers to stock your product

Efficient supply chain allowing retailers an efficient supply

Packaging design to encourage purchase

Point of sale displays

An example of this is a network television commercial. TV viewers do not request to see a car advertisement; it is simply "pushed" at them.

PULL STRATEGY A pull strategy involves motivating customers to seek out your brand in an active process.

"Getting the customer to come to you"

EXAMPLES OF PULL TACTICS

Advertising and mass media promotion

Word of mouth referrals

Customer relationship management

Sales promotions and discounts

An example of this would be a web search using a search engine. The consumer performs a search for a specific car and information is pulled up in response.

DISTRIBUTION STRATEGIES

WHAT IS DISTRIBUTION STRATEGY ?A plan created by the management of a manufacturing business that

specifies how the firm intends to transfer its

products to intermediaries, retailers and end consumers.

Larger companies involved in making products will usually also put

together a detailed production distribution strategy to guide its entry into

its target market.

INTENSIVEAn intensive distribution strategy is a plan that places products in many

different locations for distribution. Products that are used every day and

replaced often may be found in dozens of different retail outlets in any

given area. The purpose of this type of strategy is to put so much of a

product in so many locations that a customer will come across the product

frequently, making it easy for them to remember and buy the product

This type of strategy occurs most often in situations in which competition

is high.

Soft drinks are generally made available through intensive distribution.

SELECTIVESelective distribution is a retail strategy that involves making a product or group of

products available only in certain markets.

This is the opposite of Intensive distribution, where a product line is distributed to as

many markets as possible.

The best examples would be of Whirlpool and General Electric who sell their major

appliances through dealer networks and selected large retailers. They develop a good

working relationship with these selected channel partners and expect a better-than-

average selling effort.

The advantages of selective distribution are good market coverage, increased control

and reduced costs as compared to intensive distribution.

EXCLUSIVEExclusive distribution is a situation in which only certain dealers are authorized

to sell a specific product within a particular territory.

This type of distribution agreement is usually seen with high end and luxury

products.

Exclusive distribution is often mentioned in product advertising. When an ad

says something like “only available at the following stores” or provides a list of

stores where a product can be purchased, it may indicate that the manufacturer

has an exclusive agreement, and the product cannot be obtained elsewhere.

REFERENCES

www.businessdictionary.com

www.google.co.in

https://smallbusiness.yahoo.com/advisor/answers/advertising-and-marketing-1006052501387 .html

Thank You