Distribution Strategy and The Strategic Selling Cycle Chapter 7 Distribution Strategy and The Strategic Selling Cycle

“Distribution’s [main] role is to provide an effective link between production and the target consumer. In today’s environment, the main question is who will perform this task and how will it be executed given the new tools of technology and management.” Cristina Tan General Manager, Suy Sing Commercial

Edgar “injap” sia II Mang inasal marketing’s program is like an archer who is aggressive, determined, confident, and precise in aiming at targets and with a speed like an arrow in reaching goals compared to those of the more established players.

Distribution strategy and the strategic cycle

Six Elements: 1. Coverage – Having the proper types of outlet in a geographical area is important.

Placement – A product has placement when it is carried in a store Placement – A product has placement when it is carried in a store. Placement objectives or having a right target number of outlets ensure customer’s utmost convenience.

Volume – the right inventory level at the stores is critical.

Distribution Strategy and The Strategic selling Cycle Chapter 7 Distribution Strategy and The Strategic selling Cycle

Distribution Mix Coverage Having the proper types of outlet in Geographical.

Placement Having a right target number of outlets to ensure customer’s utmost convenience Place utility for consumer convenience calls for intensive distribution so that customers may get the product where they want them

Volume The right inventory level in the stores is critical Too much inventory or “overloading” the outlets, is unhealthy as it goes against how a channel member normally earns a profit. Small amount of inventory may result in out of stock situations

Display The right shelf and off-shelf locations plus adequate display space assure marketers a higher probability that consumers will choose their brand over competition

PRICING Having the right resale promotes healthy competition among dealers Price wars are usually avoided, as dealers do not gain anything in the end

GOODWILL Refers to the best relationship between a supplier and his channel members Enables marketers to have good display space, and in some cases enables firms to have advanced notice about impending competitive promotional activities or price movements

DISTRIBUTION CHANNELS Chapter 7

Distribution Channel performs the work of moving products from manufacturers to final consumers or business users.

DISTIRBUTION CHANNELS Manufacturer Distributor Exhibit 7-2: DISTIRBUTION CHANNELS Wholesaler Jobbers Retailers End Users

Distraibutors Distributors are appointed to perform the distirbution function for manufacturers in making their products available.

Wholesaling Wholesaling are activities of persons or organizations that sell to those who buy for resale or business use.

Located in Tondo, Manila There are several wholesalers located in divisoria and some manufacturers because of their lenient credit policy.

Wholesalers who also provide warehousing space for manufacturers and distribution. they are usually appointed in areas where a firm does not have economies of scale.

a sales operation where the ex-truck salesman carries stocks in his van or small truck, saturates a given territory regularly by selling his stocks on “cash” basis and delivers the stocks immediately upon order. Ex-tuck selling is usually the entry-level activity of new salesmen.

Some manufacturers or wholesalers/distributors are using the feeder model. Here, instead of a two-man team of the ex-truck salesman and delivery helper saturating a territory with stocks.

An activity involving the sale of products or service directly to final consumer.

Distribution Channels (cont.) Bryan kyle marajas Bsba – 2c

FRANCHISING An accelerated method to expand distribution coverage is thru franchising. In this method, a franchise fee is paid to the franchise owner in exchange of an established brand name, a proven system of operation, training, and other infrastructure support. It is said that franchising offers a high 90% success rate, but it must be based on having the right location.

FRANCHISING In 2007, TGP took 3 years to build a chain of 1,000 stores what took industry leader Mercury Drug 6 decades to build.

DIRECT SELLING Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Network Marketing (type of direct selling compensation scheme) is also known as the “People’s Franchise.”

DIRECT SELLING Some members of the Direct Selling Association of the Philippines (DSAP):

DIRECT SELLING The DSAP has over 2M “foot soldiers” acting as their distribution network. They also try to protect consumer rights and fights pyramiding companies that use network marketing as their front. Others hide their scam by offering products of no real world value.

INTERNET E-business has been widely known since the 90’s. No longer are companies limited to sell products through stores or direct sales.

INTERNET Business-to-business marketing is also giving a different face to the selling process as companies realize that substantial money and time can be saved from the paperless e-marketplace. The Philippines’ first internet-based procurement exchange.

HOME DELIVERY The process of home delivery:

Evaluation Distributions Channels By :Katherine Olid

Cost Efficiency It is important to estimate the long- term impact of having one`s own sales force and appointing a distributor. Once sales vol. increase to as economic level ,having one`s sales force may be cost-efficient.

Control As distributors are not the company`s employees, they may have different priorities. Profit may be their main obj. while the firm`s obj. may be market shares.

Channel Modification The marketplace is ever changing. The flexibility to modify distribution may be need.

BACKWARD DISTRIBUTION Marketing channels usually describe forward movement of products from manufacturers to ultimate consumers.

Gray Marketing Gray marketing or Parallel distribution is a term used to describe unauthorized importation and distribution of products bearing genuine brands across markets.

Global and Regional Market One major trend in Business is the regionalization of markets , which will ultimately lead to the globalization of markets.