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Distribution Planning

Distribution Planning. Distribution Planning. Multiple Channels. Foreign markets. Control versus cost. Intensity. Lesson Objectives. Using multiple channels Control versus costs Distribution intensity levels Effects of Internet on distribution planning

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Distribution Planning

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  1. Distribution Planning Distribution Planning Multiple Channels Foreign markets Control versus cost Intensity

  2. Lesson Objectives • Using multiple channels • Control versus costs • Distribution intensity levels • Effects of Internet on distribution planning • Challenges for international distribution

  3. Multiple Channels

  4. Control Versus Cost Question:Your own sales force (direct distribution)ORHire outside agents or sell to wholesaler(indirect distribution)?

  5. Company Sales Force • More control BUT… • More Cost • Salaries • Benefits • Travel expenses

  6. Using Agents Less Cost • No reimbursement • Pay on commission • No benefits/perks Less Control • Not on your payroll • Not scheduled by you • Independent

  7. Question:What stores or outlets should you use to market your products?

  8. Intensive Distribution • Using ALL suitable outlets • Highly competitive products • Frequently purchased products • Convenience goods (“everyday” goods)

  9. Selective Distribution • Use of limited outlets within a given geographic area • Regional malls • Department Stores • Large specialty stores • Moderate to high-end consumer products • Clothing, appliances, furnishings

  10. Exclusive Distribution • Using only one intermediary within a geographic area • Franchises • Car dealerships

  11. Integrated Distribution • Manufacturer owns and runs retail outlet • Outlet stores • GAP North GA Premium Outlets Dawsonville, GA

  12. E-Commerce • Internet sales • E-marketplace • B2B operations • Price comparisons • Exposure for smaller businesses

  13. Legal and Ethical Considerations • Clayton Antitrust Act of 1914 • Prohibits monopolies • Prohibits involuntary arrangements • American Marketing Assoc. Code of Ethics • Manipulation of product availability for exploitation • Coercion acts in the marketing channel • Undue influence of reseller’s handling of product

  14. Distribution in Foreign Markets • Experimenting with strategies • GM in Taiwan • Cultural differences • Reebok in Europe

  15. Distribution Planning Distribution Planning Multiple Channels Foreign markets Control versus cost Intensity

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