Distribution Strategies

1. Distribution Strategies

2. Channel of Distribution - Defined • A series of firms or individuals who participate in the flow of goods or services from producer to consumer or final user.

3. Supply Chain Management - Defined • Integration and collaboration of all members of the marketing channel.

4. Graphical Depiction of a Supply Chain

5. Factors in SuccessfulSupply Chain Collaboration

6. Channel Structure Strategy • Direct • Indirect 1. Traditional 2. Vertical corporate administered contractual relational • Structure decision is affected by technology, social/ethical standards, laws, geographic size/population, cultural traits

7. Distribution-Scope Strategy • Exclusive • strong dealer loyalty • high degree of control • potential loss in sales volume • Intensive • generally convenience goods • limited control over products • Selective • generally shopping goods • retailers apply pressure to reduce the number of outlets • greater retail support than with intensive • gain the appropriate “fit”

8. Multiple-Channel Strategy • Complementary Channels • each channel handles a different noncompeting product or noncompeting market segment • done to enlist customers and segments that cannot be served when distribution is limited to a single channel • Competitive Channels • the same product is sold through two different and competing channels • be careful of dealer resentment

9. Channel Power • A firm’s power is inversely proportional to how dependent another channel member is on that firm. • Sources of power within channel relationships: • Economic • Coercive • Expert • Referent • Legitimate

10. Conflict-Management Strategy • Channel conflict may be defined as a situation in which one channel member perceives another channel member or members to be engaged in behavior that is preventing or impeding it from achieving its goals. • Bargaining Strategy • Boundary Strategy • Interpenetration Strategy • Superorganizational Strategy • Conciliation • Mediation • Arbitration