Distribution Strategies. Channel of Distribution - Defined  A series of firms or individuals who participate in the flow of goods or services from producer.

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Presentation transcript:

Distribution Strategies

Channel of Distribution - Defined  A series of firms or individuals who participate in the flow of goods or services from producer to consumer or final user.

Supply Chain Management - Defined  Integration and collaboration of all members of the marketing channel.

Graphical Depiction of a Supply Chain

Factors in Successful Supply Chain Collaboration

Channel Structure Strategy  Direct  Indirect 1.Traditional 2.Vertical corporate administered contractual relational  Structure decision is affected by technology, social/ethical standards, laws, geographic size/population, cultural traits

Distribution-Scope Strategy ä Exclusive ä strong dealer loyalty ä high degree of control ä potential loss in sales volume ä Intensive ä generally convenience goods ä limited control over products ä Selective ä generally shopping goods ä retailers apply pressure to reduce the number of outlets ä greater retail support than with intensive ä gain the appropriate “fit”

Multiple-Channel Strategy ä Complementary Channels  each channel handles a different noncompeting product or noncompeting market segment  done to enlist customers and segments that cannot be served when distribution is limited to a single channel  Competitive Channels ä the same product is sold through two different and competing channels ä be careful of dealer resentment

Channel Power ä A firm’s power is inversely proportional to how dependent another channel member is on that firm. ä Sources of power within channel relationships: ä Economic ä Coercive ä Expert ä Referent ä Legitimate

Conflict-Management Strategy  Channel conflict may be defined as a situation in which one channel member perceives another channel member or members to be engaged in behavior that is preventing or impeding it from achieving its goals.  Bargaining Strategy  Boundary Strategy  Interpenetration Strategy  Superorganizational Strategy  Conciliation  Mediation  Arbitration