1. GROUP NO:
7

2. D I S T R I B U T I O N
STRATEGY

3. “Marketing channels are sets of
interdependent organizations
involved in the process of making a
product or service available for use
or consumption”
Philip Kotler

4. What Is Distribution Strategies ?

5. The Importance of Channels
oMarketing channels also represent a
substantial opportunity cost
oOne of their chief roles is to convert potential
buyers into profitable customer,
oMarketing channels must not just serve
markets, they must also make markets

6. Marketing Channel Strategy
Producer Intermediaries Consumer
inducing
Producer Intermediaries Consumer
ordering
Push Strategy
Pull Strategy
When intermediaries can be persuaded to stock the product, in preference to
those of competitors, then when customers visit a sales outlet and ask for a
product by its generic name it is the product of the company which is supplied.
Creating such a strong preference for the product among end users that the
resulting demand pulls the product through the channel of distribution.

7. HYBRID CHANNEL
& MULTICHANNEL MARKETING
Multichannel Marketing
“marketing using many different
marketing channels to reach a
customer”
Rangaswamy, Arvind; Gerrit H. Van Bruggen (2005). Opportunities and challenges in
multichannel marketing
PRODUCER INTERMEDIARIES CONSUMER

8. HYBRID CHANNEL & MULTICHANNEL MARKETING
Channel Integration
“the merging of retail operations in
such a manner that enables the
transacting of a customer via many
connected channels”
https://www.boundless.com/marketing/marketing-channels/marketing-channel-
relationships/channel-integration/
ONLINE ORDER OUTLET DELIVERY

9. THE ROLE OF MARKETING CHANNEL
Channel Function
• Forward flow functions:
• From company to customers
• Develop / disseminate communication
• Store and move the physical products
• Oversee transfer of ownership
• Backward flow functions:
• From customers to company
• Place orders with manufacturers
• Facilitate payment of bills
• Forward and backward flow functions:
• Gather information
• Negotiate price and transfer of ownership
• Finance inventories
• Assume risk

10. THE ROLE OF MARKETING CHANNEL
Channel Levels
• Zero level channel
• One level channel
• Two level channel
• Three level channel

11. THE ROLE OF MARKETING CHANNEL
Service Sector Channel
Service sector channels use agencies and locations to
access population to be served
• Banking
• Insurance
• Travel
“Kodak offers its customers four ways to print their digital photos-minilabs in
retail outlets, home printers, online services at its Ofoto Website, and self-
services kiosks. The world leader with 80.000 kiosks, Kodak makes money both
by selling the units and by supplying the chemical and paper they use to make
the prints.”

12. CONFLICT, COOPERATION &
COMPETITION
• Type of conflicts:
• Vertical Conflict
“Conflicts between different levels
within the same channel”
• Horizontal Conflict
“Conflicts between same levels within
the different channel”
• Multi-Channel Conflict
“Conflicts when multiple channels are
employed and all sell to same market

13. Goal Incompatibility Unclear Roles & Rights
Differences In
Perceptions
Intermediaries’
Dependence On The
Manufacturer
Cause of
Conflict

14. Type of Marketing Channels
• Most channel options involve at least one marketing
intermediary, an organization that operates between producers
and consumers or business users.
• A retailer owned and operated by someone other than the
manufacturer of the products it sells.
• A wholesaler who takes title to the goods it handles and then
distributes these goods to retailers, other distributors, or
sometimes end consumers.
• Service firms market primarily through short channels because
they sell intangible products and need to maintain personal
relationships within their channels.

15. DIRECT SELLING
• Direct channel—carries goods directly from a producer to the
business purchaser or ultimate user.
• Direct selling—a marketing strategy in which a producer
establishes direct sales contact with its product’s final users.
• Internet and direct mail are also potentially important tools for
direct selling.
CHANNELS USING MARKETING
INTERMEDIARIES
• For some products, using intermediaries may be more
efficient, less expensive, and less time-consuming.

16. DUAL DISTRIBUTION
• Movement of products through more than one channel to reach the
firm’s target market.
• Used to maximize the firm’s coverage in the marketplace or to
increase the cost-effectiveness of the firm’s marketing effort.
REVERSE CHANNELS
• Channels designed to return goods to their producers.
• Growing importance because of rising prices for raw materials,
increasing availability of recycling facilities, and passage of additional
antipollution and conservation laws.
• Also used for recalls and repairs.

17. Selecting Channels of Distribution
 In either the presence or the absence of a
traditional channel, a primary constraint is that
of the availability of various types of middlemen
 Selecting a channel of distribution can hinge on
one of these factors
 Distribution coverage required
 Degree of control desired
 Total distribution cost
 Channel flexibility

18. Selecting Channels of Distribution
 Distribution coverage – Channel selection may
depend upon the nature of market coverage
desired
 Intensive distribution – Using as many
wholesalers and retailers as possible
 Selective distribution – Using only the best
available per geographic area
 Exclusive distribution – Selected intermediaries
are given exclusive rights within a particular
territory

19. Selecting Channels of Distribution
 Degree of control desired – Achieved by the seller is
proportionate to the directness of channel
 Total distribution cost – Channel should be viewed as a total
system composed of interdependent subsystems
 Objective should be to optimize total system performance
 Generally assumed that the total system should be designed to
minimize costs, other things being equal
 Channel flexibility – Ability of the manufacturer to adapt to
changing conditions

20.  Exclusive Distribution
◦ Limiting the distribution to only one intermediary
in the territory
 Intensive distribution
◦ Distribute from as many outlets as possible to
provide location convenience
 Selective distribution
◦ Appoint several but not all retailers
Distribution Strategies

21. Basic Channels of
Distribution
Manufacturers/products
Agents/brokers
Wholesalers/distributors
RetailersRetailers
Consumers and organizational end users

22. Using two or more different channels to
distribute goods and services
 Why?
◦ Permits optimal access to each market segment
◦ Increase market coverage, lower channel cost and
provide more customized selling
 What to look out for?
◦ More channels usually means more conflict and
control problems
Multiple-Channel Strategy

23. Each channel handles a product or
segment that is different or non-
competing e.g.
• Toyota Lexus
• MPH online portals
• Magazine distributions
Complementary Channels

24. The same product is sold through two different
and competing channels e.g.
◦ Non-prescriptive drugs
◦ Electronic goods
 Why? To increase sales
 What to look out for?
◦ Over extending yourself
◦ Dealers’ resentment
◦ Control problems
Competitive Channels

25. Modify when the following changes occur:
 Consumer markets and buying habits
 Customer needs
 Competitor’s perspectives
 Relative importance of outlet types
 Manufacturer’s financial strength
 Sales volume level of existing products, and
 The marketing mix
Modifying Distribution Strategies

26.  One of the importance of any website or business is
to bring the products or services to the right people
and to reach the target audience.
 There are a number of different distribution
channels available on the Internet which could be
utilised efficiently to the benefits of any company
E-Commerce: Online Distribution

27. The Types of Warehouse
 Storage warehouses: hold goods for
moderate to long periods of time to balance
supply and demand
 Distribution warehouse: assemble and
redistribute goods as quickly as possible

28. Tasks in Physical Distribution Management
- Physical distribution refers to the actual physical flow of products
- In contrast, physical distribution management is the development
and operation of processes resulting in the effective and efficient
physical flow of products
- Effective physical distribution management requires careful
attention to five interrelated activities:
1. Order processing
2. Inventory control
3. Inventory location and warehousing
4. Materials handling
5. Transportation

29. Tasks in Physical Distribution Management
1. Order Processing
- The starting point in a physical distribution system is order
processing, which is a set of procedures for receiving, handling,
and filling orders promptly and accurately
- Electronic data interchange (EDI):
- Between customer and supplier orders, invoices, and other
business functions are transmitted by computer
- Originally, EDI required a direct computer link between supplier
and customer, now it is being conducted via the Internet
- EDI can trim the cost of order processing significantly, which in
turn may reduce purchase prices

30. Tasks in Physical Distribution Management
2. Inventory Control
- The goal of inventory control is to satisfy the order-
fulfillment expectations of customers while minimizing
both the investment and fluctuations in inventories
- Just-in-Time:
- JIT combines inventory control, purchasing, and
production scheduling
- Applying JIT, a firm buys in small quantities that arrive
just in time for production and then it produces in
quantities just in time for sale

31. Tasks in Physical Distribution Management
2. Inventory Control (continued)
- Just-in-Time: Benefits of JIT are:
- Dramatic cost savings
- Shortened and more flexible and reliable production and
delivery schedules
- Quick responses to quality problems
- Market-Response Systems:
- The central promise is that those who intend to consume a
product should activate a process to produce and deliver
replacement items
- In this way, a product is pulled through a channel on the
basis of demand

32. Tasks in Physical Distribution Management
3. Inventory Location and Warehousing
- Management must make critical decisions about the
size, location, and transportation of inventories
- These areas are interrelated, often in complex ways
- One key consideration in managing inventories is
warehousing, which embraces a range of
functions, such as assembling, dividing, and
storing products and preparing them for
reshipping

33. Tasks in Physical Distribution Management
4. Materials Handling
- Selecting the proper equipment to physically
handle products, including the warehouse building
itself, is the materials handling subsystem of
physical distribution management
- Equipment that is well matched to the task can
minimize losses from breakage, spoilage, and theft
- Efficient equipment can reduce handling costs as
well as time required for handling

34. Tasks in Physical Distribution Management
5. Transportation
- Management must decide on both the mode of
transportation and the particular carriers
- The leading modes of transportation are railroads,
trucks, pipelines, water vessels, and airplanes
- Using two or more modes of transportation to move
freight is termed intermodal transportation; this
approach is intended to seize the advantages of
multiple forms of transportation

35. CONCLUSION
- Most producers use channels to market their product.
- Effective management should include selection, training and motivating
g channel members.
- All channels have potential to conflict and should be managed well.
- Channel selection should consider legal issues.
- E-commerce and other ICT areas are still growing and can be explored
for marketing.
- It should be considered to use retail, wholesaling or both channel.
- Marketing logistic is on importance decision related to marketing
channels.

37. Thank you GROUP 7
Members :
Midhun chandran
Melin johnson
Richa pandey
Rohini kumara
Rishi
Joseph selvin