Distribution Channel Management Week 7

(4) Managing The Channel The most effective way to guarantee your distributor profitability is by……

Examples of Distributor’s Core Competency Distributor Type FMCGBranded FashionConsumer Electronic Pharma Channel coverage Provision Stores, SPM, HM, MM, Cosmetic Stores, Horeca, etc Dept Stores, Specialty Shops, Traditional Fashion Stores Modern Electronic Stores, Chain Electronic Stores, Traditional Electronic Stores Hospitals, Clinics, Government, Drug Stores, Pharmacy, Modern Pharmacy, PBF, Provision Stores, MM, SPM, HM Specific Asset Warehouse types, Delivery vehicle types Product Display SetWarehouse, Service Center Chilled Warehouse, Delivery vehicle types, Apoteker Specific Knowledge / Skill Quality Coverage, BPOM Regulation Shopping Occasion, Fashion product life cycle Currency Hedging, Shopping Occasion, Product Expert BPOM Regulation, Detailing, Expired Product Handling Specific Services Merchandising Support Interior DesignWarranty ServiceExpress Delivery Regulatory Limitation Import RegulationDrugs Distribution Regulation Working Area National, Regional, Local National, RegionalNational, Regional, Local

The Challenge is… How to recruit the RIGHT DISTRIBUTOR ? If you do business, you must be selling something. In this case you are selling the opportunity to get better profit by distributing your product

Preparing The Business Case

Show THEM The MONEY Gross Margin = x 100% Operating Margin = x 100% Contribution Margin = x 100% Sales - COGS Sales Sales – COGS – Overhead Cost – Distribution Cost Sales – COGS – Distribution Cost Sales

If your product is a market leader Characteristic of Market Leader Products Sales Volume = High % Gross Margin = Low Distribution Cost = Low # transaction = High Focus to sell: 1.Contribution Margin rather than Gross margin. 2.Opportunity that # transaction will bring for other products

If your product is new entrant Characteristic of a New Entrant Products Sales Volume = Low % Gross Margin = High Distribution Cost = High # transaction = Low Focus to sell: 1.Gross Margin rather than Contribution Margin. 2.Opportunity that additional product will bring Total Sales Growth for them

Your group should find Scientific Paper that back up Slide 7 & 8 (can be different paper), should be presented on Week 9. It accounts for 20 points of Nilai Tugas… The Presentation should contain 1.What is the Research Question 2.The Research Method explanation 3.What is the variables and back up theory used 4.What is the Result 5.Make your Reviewer Note for the Paper If there’s something you need to ask about this task, feel free to find me in the lecturer room, or contact me to make appointment. Every group eligible for 1 consultation meeting with me. You decide whether you need to use this privilege or not. This is optional not an obligation.

UTS Hints ( Kisi Kisi ) 1.Understand the Theory 2.Use your brain to think and comprehend, not to memorize 3.Sleep well the night before UTS 4.Take your breakfast 5.Don’t forget to Pray 6.Be creative and original