Distibution English 1

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MANAGEMENT OF

DISTRIBUTION

Fall 2011/2012

Instructor: Miss. Aisha Tarek Noour

Chapter One

INTRODUCTION TO MARKETING CHANNELS

1th Lecture

Miss. Aisha Tarek Noour 1


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COMPONENTS OF

STRATEGIC MARKETING


MarketingChannels
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THE NATURE MARKETING

CHANNELMarketing Channel

A group of individuals and organizations directing products fromproducers to

customers.

DistributionThe activities that make products available to customers when and wherethey want to purchase them

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IN SHORT DISTRIBUTION

The linkages ofproducersandusers.

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THE NATURE OFMARKETING CHANNELS

(CONTD) Marketing Intermediary

[Middleman or Intermediaries]

A middleman linkingproducers to other middlemenor to ultimate consumersthrough contractual arrangementsor through the purchase and resale ofproducts

create value by reducing the spatial separationthe physical distance between thepoint of production and point of consumptionbetween manufacturers and

ultimate users of products or services.


Producer

ProducerProducer

Producer

ProducerProducer

Customer

CustomerCustomer

Customer

CustomerCustomerIntermediary

IntermediaryIntermediary

Direct ChannelDirect Channel

Indirect ChannelIndirect Channel

Producer

ProducerProducer

Producer

ProducerProducer

Customer

CustomerCustomer

Customer



Producer

ProducerProducer

Producer

ProducerProducer

Customer

CustomerCustomer

Customer



Direct ChannelDirect Channel

Indirect ChannelIndirect Channel


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These middlemen, in turn,

1) Perform a variety of distribution tasks to

moveproductsto end users:2) Gathering and sharing information;

3) buying and selling different product

assortments (W/D);4) Grading, storing, and transporting products;

5) Providing financing;

6) And taking market risk



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Miss. Aisha Tarek Noour 7Slide 15-8

Types of Intermediaries


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Retailers

Wholesalers

Brokers

Andagents
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THE NATURE OF MARKETING CHANNELSWHY CHANNELS AND INTERMEDIARIES?

1) Create Exchange Utility (service) through Customer Value

Value created by intermediaries: efficiency via

reducing the number of sales contacts necessary to reachthe target market

Four Components:

Form Utility

Place Utility

Possession Utility

Time Utility



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THE NATURE OF MARKETINGCHANNELS (CONTD)

WHY CHA NNELS A ND

INTERMEDIA RIES?

Marketing Channels Create UtilityTime utility: have products availablewhenthe customer wants them

(newspaper delivery). when the customers want to purchase the product.

Place utility:making products available in locationswherethe customerswish to purchase them (convenience stores). where the customers want topurchase the product.

Possession utility:the customer has accessto the product to useor to store for future use (raincoats). facilitates customer ownership ofthe product.

Form utility:Sometimes, if changes have been made to the product in thedistribution channel, i.e. Pepsi/Coke, concentrate to bottlers.

2) Maintaining Customer Relationships



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MA R K ETIN G C H A N N EL S A C T A S

EXCHANG E FACIL ITATORS

Therefore we define a Marketing Channel as exchangerelationships

that create customer valuein the acquisition,consumption and disposition of products and services



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W HYTH E GR OWIN G IMP OR TA N C E

O F M A R K E T I N G C H A N N E L S ?

1. The emerging of information technology and E-commerce

2. A greater difficulty in gaining a sustainable competitive advantage

3. The growing power of distributors, especially retailers in

marketing, channels

4. The need to reduce distribution costs



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DISINTERMEDIATION

cutting out the middleman

Instead of going through traditionaldistribution channels, which hadsome type ofintermediate (such asa distributor, wholesaler, broker, oragent.

Companiesmay now deal with every

customer directly, for example viathe Internet. One important factor isa drop in the cost of servicingcustomers directly.

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W H I L E T E R M S S U C H A S

R E S T R U C T U R I N G , F L A T T E N I N G O U T , D O W N S I Z I N G , A N D R I G H T S I Z I N G

H AV E U S U A L L Y B E E N M E N T I O N E D I N T H EC O N T E X T O F C O R P O R A T E

O R G A N I Z A TI O N S , T H E Y A L S O A P P L Y T O

M A R K E T I N G C H A N N E L S .T H E L AT E S T T E R M . . . .

Disintermediation



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A competitive advantage that

cannot be quickly and easily

copied by competitors


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*Channel Strategy is Long Term

*Requires a Channel Structure

*Depends on Relationships and People

*Requires Effective Interorganizational

Management



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Retailers


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Retailers Act as Buying Agents for

Customers Rather than as SellingAgents for Suppliers



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D ISTR IBU TION C OSTS OFTEN AC C OU N T FOR ASIG N IFIC AN T PE R C EN TAG E OF THE FIN AL PR IC E

OF PR OD U C TS


Sometimes Distribution Costs

are Higher than the Manufacturing

Cost or the Costs of RawMaterials and Component Parts


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SOME EXAMPLES...


Autos Software Gasoline Fax Machines Packaged Foods

Distribution

Manufacturing

Raw Materials

and

Components

15%

40%

45%

25%

65%

10%

28%

19%

53%

30%

30%

40%

41%

33%

26%


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WHO IS A CHANNEL

MANAGER?

Anyone in a firm or organization who is involved in marketing channel decision

making



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To be fully effective and efficientand to

command customer satisfaction and loyalty,

channels require leadership, cooperation, andmanagement of all relationships.


Customer satisfaction + Customer loyalty=

Leadership +Cooperation and management of all relationship


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CUSTOMERS, ROSENBLOOM (1995,

1999) LISTS SEVEN

CRITICAL ACTIVITIES ACHANNEL MANAGER

PERFORMS:1) Formulating marketing channel strategy

2) Designing marketing channels3) Selecting channel members4) Motivating channel members5) Coordinating channel strategy withmembers6) Evaluating channel member performance7) Managing conflict in the channels



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T H E C H A N GE O F F O C U S TO

C H A N N E L S T R A T E G Y

Creates competitive advantage with long-term viability

Builds strongrelationships between manufacturers and channelmembers

Based on trust, confidence, and people power



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VALUE DELIVERY

NETWORK

Company, suppliers, distributors and customerswho partner to

improve system performance

A demand chain orientation: start with the needs of customers



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Factor Merchant

Wholesalers

Agents/Brok

ers

Nature of product Standard Nonstandard,

custom

Technicality ofproduct

Complex Simple

Products gross

margin

High Low

Frequency ofordering

Frequent Infrequent

Time between order

and receipt ofshipment

Shorter lead time Longer lead time

Number of customers Many Few

Concentration of

customers

Dispersed

(isolated)

Concentrated


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Those Business activities involved in the sale of goods and services to

consumers for

Personal family

or

Household use.



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CHANNEL

CONSIDERATIONS

*Types of Intermediaries

Company Sales Force, Manufacturers Agents, and Industrial

Distributors

*Number of Intermediaries

Intensive distribution: Snickers

Exclusive distribution: Rolls

Selective distribution: Acura



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THE LEVEL OF

MARKETING COVERAGE:


Intensive

Exclusive

Selective


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EXCLUSIVE CHANNEL

Exclusive is operation to market own in which is only wholesaler in

market area with manufacturers goods and services.



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EXCLUSIVE CHANNEL

It consists of no more than one to two dealers market all products.



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EXCLUSIVE CHANNEL

It means one outlet in a relatively large area.

Products purchased infrequently, last a long time and require serviceand used as an incentive to sellers plus no one to undercut them.

(Place Utility).



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Manufacturer

Wholesaler Wholesaler


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INTENSIVE CHANNEL

Goods and services offered to all channel members meeting credit

standards. Products sold wherever possible.



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INTENSIVE CHANNEL

This means all available outlets are chosen for maximum exposure

(within reasons that a consumer would purchase that type of product.



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INTENSIVE CHANNEL

For example, Timex sells through 45,000 drug stores and thousands

of other stores. It used for convenience products, especially when

sales have a direct relationship to availability. It is available more

important than the nature of the outlet, for example, gas station vs.

convenience store.

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INTENSIVE CHANNEL

Convenience products have a high replacement rate and require no

servicing, for instant, P&G rely on intensive distribution in such as,

good for consumer package goods and place utility and it

manufacturer promotional support.



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H ER E IS TH E C OMP A R IS ON B ETWEEN

D I F F E R E N T L E V E L S O F D I S T R I B U T I O N

I N T EN SI T Y: -Intensity Level Objectives Number of Intermediaries

ntensive Achieving mass marketselling. Conveniencegoods.

Many

Selective Working with the selectiveintermediaries. Special

goods.

Several

xclusive Working with singleintermediary. Specialtygoods and industrial

equipment.

One



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EXCLUSIVE CHANNEL

Moreover, it allows for the highest control and easier to get retailers

to the carry a complete inventory and to provide service and repair

facilities.



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EXCLUSIVE CHANNEL

In this exclusive distribution may be used to introduce new products,

and then change when market is more competitive (Move from

introductionto the growthstage of the product life cycle.

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Manufacturer

Wholesaler


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SELECTIVE CHANNEL

Moderate number of wholesalers used in each market area. It

consists of a few number of dealers market all products.



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SELECTIVE CHANNEL

Only some available outlets (usually geographic) are chosen. Typically

shopping products.

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SELECTIVE CHANNEL

Buyers prefer to spend time searching. In selective distribution

customer service important and producers have more control.

Moreover, it motivate and promotional retailer support.



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Information needs are high,

Customization is important,Quality assurance matters,

Purchase orders are large,

And transportation and storage are complex.



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One-stop shopping for many products is important,

Availability is important,And after-sales service is important.


TYPICAL MARKETING


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TYPICAL MARKETINGCHANNELS FOR

CONSUMER PRODUCTS



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DUAL DISTRIBUTION

Occurs when an organization distributes its product through two

or more different types of marketing channelswhich

typically compete for the same target market.

May cause conflict with channel intermediaries

Dual distribution more than one channel

* GE to consumers via retail stores; to builders



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MULTI-LEVEL

MARKETING

Avon, Mary Kay,Tupperware, sony, etc



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NUMBER OF CHANNEL

LEVELS

Channel Level - Each Layer of Marketing Intermediaries thatPerform Some Work in Bringing the Product and its OwnershipCloser to the Final Buyer.


Number of Channel Levels


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Wholesaler Jobber Retailer Consumer

Consumer

Retailer Consumer

Producer

0-level channelDirect

Wholesaler Retailer Consumer Producer

2-level channel

Producer

3-level channel

1-level channel

Producer

Number of Channel LevelsChannel Level - Each Layer of Marketing Intermediaries that Perform

Some Work in Bringing the Product and its Ownership Closer to the Final

Buyer.


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FAC TOR S TO C ON S ID ER WHENSEL EC TIN G SPEC IFIC

IN TER M ED IAR IES

The producer will want to useintermediaries who:

1) Reach their target market2) Have agood reputation3) Handle distributionfunctions efficiently4) Order large quantities5) Pay invoices quickly6) Display andpromotemerchandise well

7) Have agood location8) Professional salespeople



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Fall 2011-2012

Miss. Aisha Tarek Noour

Third Lecture

Instructor: Miss. Aisha Tarek Noour


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2/25/2014 Instructor: Miss. Aisha Tarek Noour 66

THE EXTERNAL MACRO


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THE EXTERNAL MACRO-ENVIRONMENT

The external environmentis changing veryquickly, with great implicationsfor marketing macroforces are factors over which the company has no short-

term controlmicro

forces are those that operate at thefirm level the external macro-environment affectsdifferent firms at a different pace and in different ways thebetter we understand the changing marketing environmentand its effects, the better we can develop effective marketing programs



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CHANNEL

ENVIRONMENT

Overview of the channel EnvironmentThe Channel environment facing manufacturers, wholesalers, and retailers consists of

1) Customer Demographic

2) Consumer Life-style

3) Channel Competition

4) The Economy

5) The Legal issues

6) And Technology


BUILDING SCENARIOS


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BUILDING SCENARIOSAND DEVELOPING A

CONTINGENCY PLANScenario:-Is a explanation of apossible future event or level of an activity that is likely to occur in future.[ Developing scenarios, a channel member increaseshis or her awareness of key opportunities, critical risk, and decision

alternatives.]

WITHOUR A SCENARIO These managers may not haveconsidered these opportunities, risks, andalternative strategies.


BUILDING SCENARIOS


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BUILDING SCENARIOSAND DEVELOPING A

CONTINGENCY PLAN

Scenario buildingshould be limited to those events that are very

likely to occur and /or that would have a major impact (either

opportunity or threat) on the company.



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INCOME DISTRIBUTION

Despite overall favorable income trends, there has been a widening

gap between the poorest and the wealthiest people in Egypt, USA

etc...

Income can be measured on the basic of MONEY INCOME (actual

dollar/ Egyptian pound Income) And REAL INCOME (Income that

reflects the cost of living).



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Retailers must also consider the elderly in terms of making access

to shopping areas earlier through wide aisles forwheelchairsand

motorized carts and elimination of steps) using large print for in-

store signs hiring older salespersons, training younger employees

to become more sensitive, promoting telephone and mail order

sales, providing home delivery, using early bird specials.



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NUMBER OF HOUSEHOLD

Consists of a person or group of persons occupying a home units.

(FAMILY)



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MATERIAL STATUS

Married/ Couples.

Single/ Children



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WORKING WOMEN



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VALUE ORIENTATION

The right combination of product quality,

fair price, and good service.

It means giving more: an improved product,

with added features and enhanced services

all at a better price.



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BLURRING OF GENDER

ROLES

It refers to the broadening of

typical household duties between

male and female heads of

households.



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COMPONENT LIFESTYLES

Consumer attitudes and behavior vary by purchase situation: thus

typecasting or stereotyping people may not be particularly valid.



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3) CHANNEL COMPETITION

It describes the nature of channel competition among

channel members both at the same stage and at

different stages of distribution.

Channel competition takes one of four forms:1) Horizontal.

2) Intertype.

3) Vertical.

4) Vertical Marketing System.


CONFLICT AND CONTROL


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IN CHANNELS

Channel conflictexists when channel members interfere with each others objectives.

Horizontal conflictinvolves firms on same level-- grocery store vs. drug store.

Vertical conflictinvolves firms at different levels

producer versus wholesaler

producer versus retailer

Channel Poweris the ability to influence or determine behaviour of others in channel.

Based on expertise, rewards and sanctions.



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HORIZONTAL

COMPETITIONIt consists of competition among channel members of the same type,

Such asBloomingdales and Dillards


Department Store Department Store


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INTERTYPE COMPETITION

It relates to competition among different types of channel

members at the same level within a channel.

Such as, a full service wholesaler may compete with a limitedservice wholesaler.


Full-Service Wholesaler Limited Service Wholesaler


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VERTICAL COMPETITIONIt describes competition among different channel

members at different levels within the channels.

Such as manufacturer competing with a retailer.


Manufacturer

Wholesaler


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VERTICAL MARKETING

SYSTEM COMPETITIONHorizontal coordinated and verticallyaligned establishments that are professionallymanaged and centrally coordinated compete against each other.

Such as, Sherwin Williams performs manufacturing, wholesaling, and retailing functions.



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HORIZONTAL

COMPETITIONIt can be a department store versus a department store.

A full-service wholesaler versus another full-service wholesaler.

Manufacturer versus a manufacturer.

Horizontal competition also results in a more consistent image, more

comparable customer service, and possibly less price competition

among resellers( owing it the similar cost structures of each channel

member).



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INTERTYPE COMPETITIONIntertype competition involves new channel formats that are competing against traditional

formats or competition between price and service-oriented channel members.

Manufacturers often sell their goods and services through different channel members to

maximize sales.



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VERTICAL COMPETITIONIt can be forward or backward vertical integration.

FORWARD VERTICAL INTEGRATION

Manufacturers acquire a build up retail channels or wholesalers acquire or develop retail channels.

BACKWARD VERTICAL INTEGRATION

Retailers purchase or develop wholesale operations, wholesalers acquire or build manufacturingoperations, or retailers purchase or develop manufacturing operations.

2/25/2014 Instructor: Miss. Aisha Tarek Noour88

CHANNEL MEMBERS


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PERFORM A NUMBER OF

KEY FUNCTIONS:

*Forward flow functions:

Develop / distribute communication

Store and move the physical products

Oversee transfer of ownership

*Backward flow functions:

Place orders with manufacturers

Facilitate payment of bills


O HER KEY FUNC IONSPERFORMED BY CHANNEL


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PERFORMED BY CHANNEL

MEMBERS INCLUDE THOSE

THAT FLOW BOTH WAYS:

*Forward and backward flow functions:

Gather information

Negotiate price and transfer of ownershipFinance inventories

Assume risk



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VERTICAL MARKETING

SYSTEM COMPETITIONA Situation in which horizontally coordinated and vertically aligned establishments thatare professionally managed and centrally coordinated compete against each other.



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4) ECONOMIC CHANGE

Consider the effect on consumers of:recession (business cycle)

changes in interest rates

inflation

unemployment

how are consumers likely to respond?they often shop around more; store and brand loyaltysuffer when consumers are uncertain



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5) LEGAL ISSUESLegal issues:Dual distribution:not illegal yet anti-competitive

Vertical integration:not illegal; under Clayton Act

if itlessens competition- tying arrangements- exclusive dealings- refusal to deal- resale restrictionsGrey markets


5) POLITICAL AND LEGAL


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CHANGE

Government and laws affect marketing at manylevels legislation often has implications formarketing; some more direct than others

considerable amount of consumer protectionlegislation in effect in Canada many industries aredirectly affected by legislation; packaging,

labelling, advertising



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6) TECHNOLOGICAL CHANGE

advancing technology creates new forms of competition and communications; fax,

ATMs, CD-ROM, cellular, Internet

Also creates new industries to be supplied

Also has important effects on how people spend their time: working and shopping

from home, voice mail, surfing the Net Think about the fact that today technology is

accepted by consumers, expected by them, transparent to them, and often disposable


IMPACT OF


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TECHNOLOGICAL CHANGE

launches entirely new industries, such as multimedia, digital communications andelectronic commerce

change or nearly wipe out existing industries, such as the effect of e-mail on regular mail

and even fax

motivate other markets and industries, such as the effect of the debit card and Internet

shopping on the retailing industry

Over 40% of Canadians had Internet access in 1999


THE EXTERNAL


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MICROENVIRONMENT

External to the firm, but part of its marketing system because of its close relationship

its market; the people or organizationswhose wants and needs the firm intends to

satisfy

its suppliers;the other firms upon whom the firm relies toprovide quality products

and servicesso that it can serve its customers

marketing intermediaries;other firms that represent the channel of distribution

for the firms products and services


The Companys

M k i P


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COMPANYSMARKETING

PROGRAM

SuppliersMarketinginter-mediaries

Marketinginter-mediaries

Themarket

Marketing Program


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Channel intermediaryneeds to reexamine

its current channel design under several

conditions.

The channel designsneed to be reevaluated prior to a merger oacquisition since both firms can have different channel structuresor channel structure that

overlap.

Miss aisha tarek noour100


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1) Afirm must also evaluateits channel structure, whenever it

undertakes a major change in its marketing strategysuch as the

development of new product or a focus on a new target market.

Miss aisha tarek noour 102


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FOR EXAMPLE

Xeroxrecently began to sell an inexpensivecopier aimed at thesmall office/home office market, it had to revise its channel strategy

which successfully sold larger copiers through sales representativesvisiting larger offices.

Xerox continues to use its sales representatives to sell its largercopiers, but it now sells smaller machines through office supplychains, home electronics retailers and buying clubs.



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FOR EXAMPLE

A firm with a domestic market strategy generally cannot successfully

export goods to foreign markets without the assistance of a foreign

export specialist.



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3) A firm also need to reevaluate its current strategy as a result of

A) The loss of a major client,

B) An increase in gray market activities,

C) Changes in the importance of new channels,

D) Changes in buyer behavior.



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FIRST


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DETERMINING CHANNEL

OBJECTIVES

Typical objectives for a channel member can be to successfully

integrate the channel coverage.

1) To secure widespread distributionin a particular channel such as

supermarket.

2) To reduce salesby unauthorized dealers or to increase distribution for

a product to new markets while keeping investment requirements to a

minimum level.



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Specific channel objectivescan be determined by identifying a customersdistribution needs based on an examination of the service outputrequirements of its target customers.

To the extent thatproducers and end usersare unable to perform theseservice outputsor cannot perform these outputs efficiently,intermediaries are needed.


REQUIREMENTS MAY BE


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GROUPED INTO FIVE

CATEGORIESLot sizeMarket decentralization

Waiting time

Product variety

Service backup



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LOT SIZE

Describes the consumer desire to purchase a product in small

quantities.



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MARKET

DECENTRALIZATION

Concerns the importance of convenient location.

Although some customers may travel a long distance for a product,

others want accessible retailers.



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WAITING TIME

Reports on delivery speed.



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PRODUCT VARIETY

Measuring the need to see competing brands and products.



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SERVICE BACKUP

Assesses the importance of having a product repaired in home or in

office.



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Channel objectivescan relate to improvement in any of the service

outputs.

A firmcan also segment a market based on differences in needs of

different customer groups.



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SECOND

ASSESSING CHANNEL WIDTHAN DEPTH AND

TYPES OF INTERMEDIARYREQUIREMENT



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A channels service output specifications directly affect the channels

length and depth.


THERE ARE TWO MAJORT A


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ELEMENTS OF CHANNEL

DESIGN ARE

Channel Length

Channel Width



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Channel length requirements:Specify the number of the channel levelsthat are required to fulfill a suppliers objectives.

Channel width requirements:specify the number of intermediariesthat are needed at each level in the channel.



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CHANNEL LENGTH

The alternatives for channel length range from

1) direct distribution( with two levels; a manufacturer and a final

consumers).

2) Indirect distribution ( with five levels ( product sold through a

manufacturer to an exporter to a wholesaler to a retailer and

then to a final consumer).



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LONG CHANNEL

(INDIRECT CHANNEL)

Required limitedfinancialrecourses,

They provide a supplier with a low

degreeof control over the

distributionprocess.



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SHORT CHANNEL

Usually short channel are often used them with large over all sales.

And also associated with products in the early stages of a product

life cyclebecause of the need for highly trained employees to explain

a products features and to handle complex installations.



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SHORT CHANNELShort channels enable a manufacturer to have maximum channel control.

Short channels recognize that it is easier to control your own employeesthat the

employees of an independent distributors, retailers and even franchisees.

Consumers prefer dealing directly with a manufacturer especially when a product is

complexand must be customized to the individual customers needs.


THE DISADVANTAGES


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THE DISADVANTAGES

OF SHORT CHANNEL

A manufacturer have sufficient capital to conduct all channel

activities and that a manufacturer have sufficient knowledgeand

the additional human resources to conduct these activities

efficiently.



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LONG CHANNEL

Each independent channel members ( manufacturers, wholesalers,

retailers) takes pm specified channel responsibilities.

A long channel indicates that a relatively large number of independent

firms are involved in the channel arrangement.

Long channels are generally associated with high channel

specification and with wide geographical coverage.



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Long channels give he user the ability to distribute to

1) a large number of customers, reduce financial requirements

for manufacturers,

2) allocate channel member responsibilities among channel members,

3) and enable consumers to purchase a large proportion of their

needs from one source.



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A long channel reduces the financial and human resource

requirements of each retailer, for other channel members would now

undertake warehousing, shipping, credit and field selling activities.


THE DISADVANTAGES OF

LONG CHANNEL


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LONG CHANNEL

More intermediaries involved in getting a suppliers product to

market, the less control supplier can generally exerciseover the

products flow and transportation.



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INTERMEDIARIES AT

EACH LEVEL IN A


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EACH LEVEL IN A

CHANNEL

There are three types of competitive environment are horizontal,

intertypes and vertical competition.


EVALUATING MARKET/

PRODUCT/ MANUFACTURER/


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PRODUCT/ MANUFACTURER/

INTERMEDIARY/ FACTORSTHAT AFFECT CHANNEL

LENGTH

This section studies market, product, manufacturer and intermediary factors

that affect a channels length


REFLECT A PRODUCT

POSITIONING ON THE


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POSITIONING ON THE

BASIS OF

1) Replacement rate

2) Gross margin

3) Adjustment

4) Time of consumptionMiss aisha tarek noour 135


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Replacement rate:-

The rate at which a product is purchased by users.

Gross margin:-

The total channel costs measured by the difference

between product costs and the final selling price for

a goods.

Adjustment:-Miss aisha tarek noour 136


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Time of consumption

The time period during which the product is used. In general, goods

with low time of consumption are likely t have a high replacement

rate. However, some products such as aspirin have a short time of

consumption but a long replacement rate.



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Searching time

The amount of effort expended by customers to shop for a particular

good. Search time is measured by the travel time and distance

consumers will travel to shop for a given product.

All product is classified on three degree to which they possess these

factors.

Red goods/ Orange goods/ and yellow goods



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MARKET FACTORS

Size of customer base

Geographic dispersion

Customer density

Sales gestation period

Level of customer

Average order size



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PRODUCT FACTORS

Bulk

Perishability

Unit value

Product standardization

Technical nature

Gross margin


MANUFACTURER


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MANUFACTURER

FACTORS

Size

Financial capability

Desire for control

Managerial expertise

Customer Knowledge



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INTERMEDIARY FACTOR

Availability

Cost

Quality



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THESE ARE TASKS ARE

ORGANIZED BY


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O G N

ACTIVITIESSelling

Channel support

Physical distribution

Product Modification and After sale service

Risk Assumption


RESPONSIBILITIES

AMONG THE CHANNEL


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PARTICIPANTS

The responsibilities among channel members

1) Reducing distribution

2) Maximizing market share, sales revenue, and

profit.

3) Optimizing the return on distribution-specific

investment risks

4) Meeting customer needs for product technicalMiss aisha tarek noour 145

SELECTION OF

SPECIFIC CHANNEL


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RESELLERThis section is divided into three main parts: determining the

availability of channel resellers, evaluating resellers on a

preliminary basis, and conducting a

comprehensive analysis of resellers.


SIXTH

REVISING CHANNEL


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ARRANGEMENTChannel decisions are of a long term nature they should not beviewed as unchangeable. To be effective, a channel system needs toreflect changes in consumer behavior, the relative importance ofspecific channels and a firms current product mix.

One approach to revising a current distribution system is to evaluatethree different distribution systems; an ideal system, the existingsystem, and a management bounded system.

Distibution English 1

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Transcript of Distibution English 1