DISTRIBUTION Chapter 21.1 PowerPoint Presentation, PPT - DocSlides

DISTRIBUTION Chapter 21.1 PowerPoint Presentation, PPT - DocSlides

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What is Distribution?. Making the “. place. ” decision . or. . getting the product into the customers hands. Concept of Distribution:. In order for distribution to occur, marketers must decide on their . ID: 713671

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Chapter 21.1


What is Distribution?

Making the “


” decision


getting the product into the customers hands

Concept of Distribution:

In order for distribution to occur, marketers must decide on their

“channels of distribution”

or how they will get the product to the customer


Channels of Distribution

The path a product takes from its producer (


) to the final user (

the customer




Move products from the manufacturer to the final user

Also known as middlemen

Classified based on whether or not they take


of the product



Merchant Intermediaries

– take ownership


– do not take ownership


Channel Members


buy large quantities of goods from manufacturers, store the goods, and then resell them to other businesses

Types of Wholesalers

Rack Jobbers

wholesalers that manage inventory and merchandising for retailers by counting stock, filling it in when needed, and maintaining store displays

Ex: potato chips, CDs, greeting cards

Drop Shippers

own the goods they sell but do not physically handle the actual products

EX: coal, lumber, chemicals


Channel Members


sell goods to the final consumer for personal use


traditional retailers that sell goods to the customer from their own physical store


Channel Members

Non-store Retailing

Automatic Retailing (vending machines)

Independent Sales

Catalog Retailing

E-tailing (online retail)

TV home shopping


Channel Members



do not own the goods they sell. They bring buyers and sellers together

They are usually paid commission

a fee or percentage of the sale paid for services rendered


Channels in the Consumer Market


Channel A

Manufacturer/Producer to Consumer

Direct distribution –

sales of goods or services directly to the customer, with no intermediaries

Ways to sell directly to customers

1. Selling products at the production site

Luck Stone

sell stone directly from quarry

2. Having a sales force call consumers


3. Using catalogs

Victoria’s Secret

4. Using the Internet


Channel B

Manufacturer/Producer to Retailer to Consumer

Most commonly used channel for merchandise that dates quickly or needs servicing


clothing, automobiles, produce


Channel C

Manufacturer/Producer to Wholesaler to Retailer to Consumer

Most common distribution method for staple goods, which are items that are always carried in stock and whose styles do not change frequently


flowers, non-perishable food items, candy


The Industrial Market

Industrial Market

–buy products to use in their operations; also called the business-to-business market

Industrial users have different needs than retail users

Direct distribution (the least common channel in the consumer market) is the most common in the industrial market



Skim through Chapter 21.1 in the textbook and complete the following questions

Page 453 – questions 1-3

Page 459 – questions 3, 4, 5

Use each of these words in a sentence that

illustrates your understanding of its definition

Channel of Distribution Wholesalers

Rack Jobbers Direct Distribution

Drop Shippers Indirect Distribution

Brick and Mortar retailers Industrial market

e-tailing Intermediaries

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