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2. Distributing Products
Chapter 12
Distributing Products

3. Copyright 2005 Prentice- Hall, Inc.
Chapter Outline
The Distribution Mix
Wholesaling
Retailing
Physical Distribution
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4. Copyright 2005 Prentice- Hall, Inc.
Intermediaries
Wholesaler- Sells Products To Retailers For Re-Sale
Retailer- Sells Products Directly To Consumer
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5. Copyright 2005 Prentice- Hall, Inc.
Channels
Distribution- Network Through Which Product Passes On Its Way To The End User
Direct
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6. Channels Of Distribution
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7. Copyright 2005 Prentice- Hall, Inc.
Direct Distribution
No Intermediaries
Producer Uses Own Sales Force
Used By Many Internet Companies
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8. Copyright 2005 Prentice- Hall, Inc.
Retail Distribution
Producer Sells To Retailer
Growing Area In Internet Sales
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9. Copyright 2005 Prentice- Hall, Inc.
Wholesale To Consumer
Once Most Prevalent Nondirect Method
Requires Large Amount Of Floor Space
Space Is Too Expensive
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10. Copyright 2005 Prentice- Hall, Inc.
Sales Agents/Brokers
Agents/Brokers Represent Producer
Agents/Brokers Paid On Commission
Agents May Represent Several Similar Producers/Product Lines
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11. Nondirect Distribution
Pros
Intermediaries Provide Added Value
Value Grows With Each Link
Cons
Markup At Each Link In Chain
Higher Consumer Prices
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12. Copyright 2005 Prentice- Hall, Inc.
Value-Adding
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13. Copyright 2005 Prentice- Hall, Inc.
Agent Distribution
Agent Is Sole Intermediary
Agent Distributes To Consumer & Business
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14. Industrial Distribution
Usually Direct From Producer To Industrial Buyer
Goods Usually Purchased In Large Quantities
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15. Wholesale Distribution Of Industrial Products
Used Mostly For Accessory Equipment
Intermediaries Breakdown Large Quantities To Manageable Size
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16. Wholesale Distribution To Business Retailers
Intermediaries Similar To Traditional Wholesalers
Consumers Use Discount Stores That Buy In Volume And Sell In Small Quantities With Small Markup
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17. Distribution Strategies
Intensive
Selective
Exclusive
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18. Copyright 2005 Prentice- Hall, Inc.
Channels
Conflict- Channel Members Disagree About Roles/Rewards
Leadership/Captain- Most Powerful Member of Distribution Channel
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19. Copyright 2005 Prentice- Hall, Inc.
Merchant Wholesalers
Full-Service
Limited-Function
Drop Shippers
Rack Jobbers
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20. Copyright 2005 Prentice- Hall, Inc.
Agents/Brokers
Independent Representatives
Work On Commission
Do Not Take Ownership Or Possession
Have Extensive Knowledge Of Market
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21. Copyright 2005 Prentice- Hall, Inc.
E-Intermediary
Functions
Collect Information About Sellers For Consumers
Deliver Internet Products To Buyers
Syndicated Sellers
Shopping Agents
Business-to-Business Brokers
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22. Product Line Retailers
Department Stores
Supermarkets
Specialty Stores
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23. Copyright 2005 Prentice- Hall, Inc.
Bargain Retailers
Discount Houses
Catalog Showrooms
Factory Outlets
Warehouse/Wholesale Club
Convenience Stores
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24. Nonstore/Electronic Retailing
Direct-Response Retailing
Mail Order- Catalog
Telemarketing
Direct Selling- Door To Door
Multilevel Marketing
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25. Small Business & The Web
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26. Copyright 2005 Prentice- Hall, Inc.
Electronic Retailing
E-Catalogs
Electronic Storefront
Cybermalls
Interactive Marketing
Video Marketing
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27. Copyright 2005 Prentice- Hall, Inc.
Types Of Warehouses
Private- Owned By Single Manufacturer, Wholesaler, Retailer
Public- Independently Owned & Operated
Storage- Used For Extended Periods
Distribution Centers
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28. Copyright 2005 Prentice- Hall, Inc.
Warehousing Costs
Inventory Control
Materials Handling
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29. Factors In Selecting Transportation Mode
Cost
Nature Of Product
Distance
Speed
Customer Wants/Needs
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30. Copyright 2005 Prentice- Hall, Inc.
Transportation Modes
Trucks
Railroads
Planes
Water
Pipelines
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31. Transportation Modes Changes
Intermodal- Birdyback
Containerization
Distribution & E-Customer Satisfaction- Order Fulfillment
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32. Copyright 2005 Prentice- Hall, Inc.
Transportation- Hubs
Supply-Side
Prestaging
Distribution
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