Methods of Distribution in Marketing Rahima Tukur Management- 15/0102

What is Marketing? Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably. Its goal is to attract new customers by promising superior value and to keep current customers by delivering satisfaction.

Distribution and Distribution Channels Distribution is a set of interdependent organisations involved in the process of making a product available for use by the consumer or business user. The channel of distribution is therefore those organisations through which a product must pass between its point of production and consumption.

The Role of Intermediaries In distribution channels, intermediaries buy large quantities of many producers & break them down into the smaller quantities and broader assortments wanted by consumers.

A.Number of contacts without a distributor (M x C= 3 X3=9 Number of contacts with a distributor (M+ C= 3+3= 6) M= Manufacturer C= Consumer D= Distributor

NUMBER OF CHANNEL LEVELS Each layer of Marketing intermediaries that performs some work in bringing the product and its ownership closer to final buyer is a Channel Level. Consumer Distribution Channel Industrial Distribution Channel

1. Consumer Distribution Channel: Channel 1- Direct Marketing Channel(no Intermediary level) Channel 2- Indirect Marketing(One Intermediary level) Channel 3- Indirect Marketing(Two Intermediary level) Channel 4- Three Intermediary level)

Consumer Marketing Channels

2. Industrial Distribution Channel: Business marketer Business customer Industrial distributors Business customer

Organisational Channels of distribution New channel organisations have evolved to challenge conventional channels. A recent one is the VMC to challenge CMC.

Types of Vertical Marketing Systems Corporate VMS- Conflict management & co- ordination are attained through common ownership at different levels of the channel Contractual VMS- Independent organisations at different levels of production & distribution, which join together through contract to obtain more economies or sales impact than each could achieve. Administered VMS- Co-ordinates successive stages of production & distribution through size &power of one of the parties.

Horizontal Marketing System Two or more companies at one level join together to follow a new marketing opportunity.

Hybrid Marketing System Occurs when a single firm sets up two or more marketing channel to reach one or more customer segments.

Hybrid Marketing Channels