Topic: Management of Distribution Unit: Distribution 4.02 Understand the concepts and processes needed to move, store, locate, and/or transfer ownership of goods and services Topic: Management of Distribution Unit: Distribution

Possible distribution channels Retail outlets – owned by YOU or an independent chain Wholesale outlets – same Sales force – compensated by salary, commission, or both Direct mail – via YOUR own catalog or flyer Telemarketing – on YOUR own or contract out Cybermarketing – TV and cable – direct and home shopping channels

Factors that affect the choice of distribution Perishability of the product – require rapid delivery and careful handling. Include items such as bread, fresh flowers, and ice cream. Geographic distance between producer and consumer – As the distance between producer and consumer increases so does the number of channel members Need for special handling of the product – for example gasoline or large computer systems. Will either have few handlers or go directly to the user

Factors cont’d Number of users – the greater the number of users, the more channels members there probably will be. Number of types of products manufactured – for example, pottery, probably sell directly to a wholesaler. Electrical products probably sell to large retailers. Financial strength and interests of the producer – large companies who are strong are better able to perform marketing activities required to move goods through the least number of channel members

Selecting YOUR distribution channel Choose a single channel or a limited number of distribution channels that offer: Identify what competitors are doing Analyze your SWOT The greatest ease of entry against the competition Lowest costs of entry compared to the competition Least financial risk and commitment to the trade Sufficient volume potential to reach short-term goals