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Distributions Function
The major purpose of marketing is to satisfy human needs by delivering products of various types to buyers when and where they want them and at a reasonable cost. The when and where is the function of Distribution
Distribution
P R O D U C E R C O N S U M E R
DISTRIBUTION
Transfer
Payments Physical Distribution Risk Taking
Communication Negotiation
Ordering Financing
ONSUMER
HOLESALER
Business-to-Business Channels
Wholesaler
Retailer
Consumer
Administered
Leadership is Assumed by One or a Few Dominant Members
Contractual
Contractual Agreement Among Channel Members
Exclusive Distribution
Distribution Intensity
Selective Distribution
Intensive Distribution
Producer
Retailer
Retailer
Retailer
Retailer
Retailer
Retailer
Selective Distribution
Producer
Retailer
Retailer
Retailer
Retailer
Retailer
Retailer
Exclusive Distribution
Producer
Retailer
Economic Power
Legitimate Power
Physical Distribution
Inventory Control
When to order How much to order
Order Processing
Received Processed Shipped
Transportation
Rail, Water, Trucks, Air, Pipeline, Internet
Warehousing
Number Needed Where What Type
Transportation Modes
Rail
Cost-effective for shipping bulk products, piggy-back, fishyback, birdyback.
Water
Low cost for shipping bulky, low-value, non perishable goods, slowest form.
Truck
Most important carrier for consumer goods, flexible.
Air
High cost, ideal when speed is needed or distant markets have to be reached
Pipeline
Carry petroleum based products, very low cost, requires little energy.
Internet
Web sites have products available, used especially for services.
Channel Relationships
Cooperation
Conflict
Power
Coercive Expert Legitimate
High (FIRE) Act to avert or address Allow threatened conflict channel to decline Low Look for opportunities Do nothing (Smoke) to reassure threatened channel and leverage your power
Differentiate the Channel offer Define Exclusive Territories Enhance or Change the Channels Value
Difficult
OK