2 2 distribution Components to distribution physically distributing goods through those channels selecting, developing, and managing distribution channels

Channels of Distribution refer to the paths of ownership that goods follow as they pass from the producer to consumer

Channels of Distribution Producer ConsumerProducerConsumerRetailerProducerConsumerRetailer Import and/or Wholesaler ProducerConsumer Speciality Channel

Distribution INTENSITY exclusive selective integrated Intensive

BUY

INTENSIVE Distribution Goal is to SELL to as many as possible, wherever they shop.

Grocery Store Convenience Store Gas Station Drugstores Hardware Stores Warehouse Clubs Not hard to find, it’s sold everywhere... Reach the MAXIMUM number of customers

SELECTIVE Distribution Means that a limited number of stores in a given geographic area are used to sell the product. The goal is to select channel members that can maintain the image of the product and are good.

SELECTIVE Distribution

EXCLUSIVE Distribution Involves protected territories for distribution of a product in a particular area with few retailers. Prestige, image, channel control, and a high profit margin for both the manufacturer and retailer are guaranteed.

INTEGRATED Distribution Manufacturer acts as wholesaler and retailer for its own products.

MAC

Types of Channels

Retailers Retailing is defined as the selling of goods and services to consumers. Retailers incorporate 5 “rights” of merchandising as their primary functions. 1. The Right Price 2.The Right Time 3.The Right Place 4.The Right Merchandise 5.The Right Quantities DIRECT Manufacturer sells directly to consumer Many service businesses must use direct channels Restaurants use direct channels primarily Outlet stores are usually owned and operated by a manufacturer (ex. GAP) Companies like Avon that sell door to door, use a direct channel The internet has allowed many different types of business meet their consumers needs directly INDIRECT Importers, wholesalers, and retailers are also referred to as Intermediaries A mark up is added every time an intermediaries are used Wholesalers Warehousing Risk Bearing Financing Buying Transporting Managing Promoting Provide market information SPECIALTY Channels of distribution referring to any indirect channels that do not involve a retail store Vending Machines The Internet Catalogues Telemarketing Television Sales