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Channel Management. Sec. 21.2 – Distribution Planning The key considerations in distribution planning When to use multiple channels of distribution How.

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Presentation on theme: "Channel Management. Sec. 21.2 – Distribution Planning The key considerations in distribution planning When to use multiple channels of distribution How."— Presentation transcript:

1 Channel Management

2 Sec. 21.2 – Distribution Planning The key considerations in distribution planning When to use multiple channels of distribution How to compare the costs and control involved in having a direct sales force versus using independent sales agents The three levels of distribution intensity The effect of the Internet on distribution planning

3 Understanding Distribution Planning Key Considerations in Distribution Planning Involves decisions about a product’s physical movement and transfer of ownership from producer to consumer The decisions affect a firm’s marketing program. Some of the major considerations follow:

4 Multiple Distribution – used when a product fits the needs of both industrial and customer markets. “We're #1 in every foodservice segment: K-12 Schools, College/University, Healthcare, Business Dining, Lodging, and Restaurants!“ You can also buy this brand in your local grocery store.

5 Understanding Distribution Planning Control vs. Costs – Producers must weigh the control they want to keep –W–Who does the selling? A direct sales force is costly. With an agent, a manufacturer loses some of its control over how sales are made

6 –Who dictates the terms? Giant retailers (Wal- Mart, Home Depot) require special services like shipping, pricing, packaging, and merchandising. Click on the Wal-Mart image above to learn more about their RFID requirements. Click on the RFID image to learn about what it is.

7 Distribution Intensity Exclusive Distribution – involves protected territories in a given geographic area. Prestige, image, channel control, and a high profit margin for both the manufacturer and intermediaries. Click the receiver to see the number of dealers in your area.

8 Distribution Intensity Selective Distribution – means that a limited number of outlets in a given geographic area are used to sell the product. The intermediaries chosen are selected for their ability to cater to the final users that the manufacturer wants to attract.

9 Distribution Intensity Intensive Distribution – involves the use of all suitable outlets to sell a product. The goal is complete market coverage

10 Distribution Intensity E-Commerce – products are sold to customers and industrial users through the use of the Internet. B2B operations provide one-stop shopping and substantial savings for industrial buyers.


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