ELEMENTS OF DISTRIBUTION Marketing Management Session 8 October 31, 1997.

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Presentation transcript:

ELEMENTS OF DISTRIBUTION Marketing Management Session 8 October 31, 1997

COURSE OUTLINE Distribution: The origins of modern marketing Some common myths of distribution Managerial aspects of distribution Video: The Fresh Connection Guest speakers: Procter&Gamble

MYTH No. 1 The presence of middlemen increases the cost of the product to the consumer.

MYTH No. 2 Direct channels of distribution should be used for highly perishable goods.

MIDDLEMEN PROVIDE Form utility Place utility Time utility

IMPORTANT FACTORS OF DISTRIBUTION Direct vs. indirect channels Market coverage Type of middlemen Channel organization

IMPORTANCE OF DISTRIBUTION Long-term decision Costly decision Involving various departments Involving various firms Least controlable

TYPE OF CHANNELS Direct channels: conditions? –Product category –Customers –Positioning, … Indirect channels: conditions? –Product category –Customers –Positioning

MARKET COVERAGE Intensive distribution (mass distribution) Selective distribution Exclusive distribution

OTHER ASPECTS Logistics –Transportation –Warehousing Retailing –Retailer part of the distribution channel –As marketing company

TYPE OF MIDDLEMEN Wholesalers vs. retailers Merchants vs. intermediary Services provided

NEXT CLASS Pricing decisions, chapter 17 (incl. Appendix) and chapter18 Pricing objectives Pricing flexibility Pricing strategies over the PLC Methods of price setting Fottle II, pricing decision Video: Leader of the pack, What the market can bear