6: Selecting channels of distribution
Technicality of product
products that require technical asssistance are sold directly
, without retailers e.g airplanes
**Price of produc
expensive products sold through limited outlets:** empathises exclusiveness + high quality
Life of product
longer shelf life=longer distribution channel while perishable=direct
e.g fruits, bread,...
Geographical distribution of customers
geographical scatter of customers uses networks of wholesales/retailers
- if in different country then
Nature of product
industrial products usually sold through direct channels more than consumer products
which are distributed through
wider distribution channel
*Frequency of purchase
- frequently purchased
through retailers, easily available
e.g soap, shampoo**
channels of distribution
1: Direct marketing producers to consumers
consumer market with improvement in technology
employed by specialist mail-order manufacturers + factory outlets
retail chains buy in bulk
deal directly with the manufactures
undertake their own wholesale functions.
E.g. Carrefour, Wal-Mart
large supermarkets chain
reduced the importance of the independent wholesaler
3: Manufacturer - wholesaler-retailer-consumer
Small retailers depend on wholesalers for supplies and manufacturers are also keen to avail themselves the services of wholesalers.
The wholesaler buys in bulk from the producer and distributes to small retailers in according to their needs.
def:processess and partners that moves product to customers
DIRECT - producer and customers deal with each other directy
e.g company owned stores, sales force, internet
high quality contact with customer
- memployees only focus on advocating customers
- direct contact
dedicated to products
high fixed cost
on own to generate leads
INDIRECT - independent retailers between producer and customer
reach new market segments
lower fixed cost
less focus on product
- DON'T WORK FOR COMPANY, BUT FOR THEMSELVES
-give some profit to channel
limit of customer information
- nOt direct,
If a product is very good, well promoted and the best prices offered still
customers would not be able to buy if it is not easily accessible
distribution is important
4 KEY QUESTIONS
fit brand positioning?
is channel a good
fit for the organization?
achieve economic goals through channel?
fit target customers?