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Fashion

Marketing
Management

Marketing mix:
Place

Session: 10
Date:
00/09/2014

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

What is a Distribution Channel?


A set of interdependent
organizations (intermediaries)
involved in the process of making a
product or service available for use
or consumption by the consumer or
business user.
Marketing Channel decisions are
among the most important
decisions that management faces
and will directly affect every other

Why are Marketing Intermediaries


Used?
The use of intermediaries results from
their greater efficiency in making goods
available to target markets.
Offer the firm more than it can achieve on
its own through the intermediaries:

Contacts,
Experience,
Specialization,
Scale of operation.

Purpose: match supply from producers to


demand from consumers.

Distribution
P
R
O
D
U
C
E
R

DISTRIBUTION

C
O
N
S
U
M
E
R

Financing
Financing
Ordering
Ordering
Negotiation
Negotiation
Communication
Communication

Risk
Risk Taking
Taking
Physical
Physical
Distribution
Distribution
Payments
Payments
Transfer
Transfer

Information
Information

Distribution
Distribution Channel
Channel
Functions
Functions

Typical Channels of
Distribution
ANUFACTURE
R

ONSUME
R

GENT
ETAILER

HOLESALER

Business-to-Business Channels

Direct

Wholesaler
Agent

Business-to-Business Channel
Trends

Disintermediation

Infomediaries & Vertical Exchange

Conventional Distribution
Channel vs. Vertical Marketing
Systems Vertical

Manufacturer

Wholesaler

marketing
channel

Manufacturer
Wholesaler

Conventional
marketing
channel

Retailer

Retailer

Consumer

Consumer

Contractual
Contractual

Contractual
Contractual Agreement
Agreement Among
Among
Channel
Channel Members
Members

Administered
Administered

Leadership
Leadership is
is Assumed
Assumed by
by One
One or
or
aa Few
Few Dominant
Dominant Members
Members

Corporate
Corporate

Common
Common Ownership
Ownership at
at Different
Different
Levels
Levels of
of the
the Channel
Channel

Types
Types of
of Vertical
Vertical Marketing
Marketing Systems
Systems

Vertical Marketing Systems


Corporate systems - total
ownership
Contractual - legal relationships

Administered - strong
leadership

Planning the Channel of


Distribution
Determining the structure

Marketing mix strategy


Organizational resources
External environmental factors
Market characteristics
Consumer preferences and behavior
The nature and availability of Intermediaries
Other environmental factors

Customers Desired Service


Levels

Lot size
Waiting time
Spatial convenience
Product variety
Service backup

Steps in Distribution Planning

Distribution
Distribution
Intensity
Intensity

Selective
Selective
Distribution
Distribution

Exclusive
Exclusive
Distribution
Distribution

Intensive
Intensive
Distribution
Distribution

Choosing a Distribution
System

Intensive Distribution
Producer

Seeks
Seeks to
to obtain
obtain
maximum
maximum
product
product
exposure
exposure at
at the
the
retail
retail level
level

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Selective
Selective Distribution
Distribution

Producer

Product
Product is
is sold
sold
in
in aa limited
limited
number
number of
of
outlets
outlets

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer

Exclusive Distribution

Product
Product is
is sold
sold in
in
only
only one
one outlet
outlet in
in
aa given
given area
area

Producer
Retailer

Distribution
Distribution Channels
Channels &
& the
the Marketing
Marketing Mix
Mix
Reward
Reward or
or
Coercive
Coercive
Power
Power

Legitimate
Legitimate
Power
Power

Economic
Economic
Power
Power

Managing
Managing the
the Channel
Channel of
of Distribution
Distribution
Channel
Channel Leader
Leader Power
Power

Selecting
Selecting Channel
Channel Partners
Partners

Developing Distribution
Tactics

Physical Distribution
Inventory
Inventory
Control
Control

Order
OrderProcessing
Processing
Received
Received
Processed
Processed
Shipped
Shipped

When
Whento
toorder
order
How
much
to
How much toorder
order

Transportation
Rail, Water,
Trucks, Air,
Pipeline,
Internet

Physical
Distributio
nFunctions
Materials
MaterialsHandling
Handling

Moving
MovingProducts
ProductsInto,
Into,
Within,
Within,and
and
Out
Outof
ofWarehouses
Warehouses

Warehousing
Warehousing

Number
NumberNeeded
Needed
Where
Where
What
WhatType
Type

Transportation Modes
Rail
Rail

Cost-effective
Cost-effectivefor
forshipping
shippingbulk
bulkproducts,
products,
piggy-back,
fishyback,
birdyback.
piggy-back, fishyback, birdyback.

Water
Water

Low
Lowcost
costfor
forshipping
shippingbulky,
bulky,low-value,
low-value,
non
nonperishable
perishablegoods,
goods,slowest
slowestform.
form.

Truck
Truck

Most
Mostimportant
importantcarrier
carrierfor
forconsumer
consumer
goods,
goods,flexible.
flexible.

Air
Air

High
Highcost,
cost,ideal
idealwhen
whenspeed
speedis
isneeded
neededor
or
distant
distantmarkets
marketshave
haveto
tobe
bereached
reached

Pipeline
Pipeline

Carry
Carrypetroleum
petroleumbased
basedproducts,
products,
very
verylow
lowcost,
cost,requires
requireslittle
littleenergy.
energy.

Internet
Internet

Web
Websites
siteshave
haveproducts
productsavailable,
available,used
used
especially
especiallyfor
forservices.
services.

Channel Relationships
Cooperation

Conflict
Power
Coercive
Expert
Legitimate

14. Claims Response


Common Issues in Supply15.
Chain
Management
Billing
Procedures
16. Average Order Cycle
1. Order Processing Time
Time
2. Order Assembly Time
17. Order Cycle Time
3. Delivery Time
Variability
4. Inventory Reliability
18. Rush Service
5. Order Size Constraints 19. Product Availability
6. Consolidation
20. Competent Technical
Stipulation
Reps
7. Consistency of
21. Equipment
Delivery
Demonstrations
8. Frequency of Sales
22. Availability of
Visits
Literature
9. Ordering Convenience 23. Accuracy in Filling
10. Order Progress
Orders
Information
24. Terms of Sale
11. Inventory Backup

Thank You

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