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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Presentations text content in DISTRIBUTION Chapter 21.1
Slide1
DISTRIBUTION
Chapter 21.1
Slide2
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
“channels of distribution”
or how they will get the product to the customer
Slide3
Channels of Distribution
The path a product takes from its producer (
manufacturer
) to the final user (
the customer
)
Slide4
Intermediaries
Move products from the manufacturer to the final user
Also known as middlemen
Classified based on whether or not they take
ownership
of the product
Slide5
Intermediaries
Merchant Intermediaries
– take ownership
Agents
– do not take ownership
Slide6
Channel Members
Wholesalers
–
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
Slide7
Channel Members
Retailers
–
sell goods to the final consumer for personal use
Brick-and-Mortar
–
traditional retailers that sell goods to the customer from their own physical store
Slide8
Channel Members
Non-store Retailing
Automatic Retailing (vending machines)
Independent Sales
Catalog Retailing
E-tailing (online retail)
TV home shopping
Slide9
Channel Members
Agents
-
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
Slide10
Channels in the Consumer Market
Slide11
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
Telemarketing
3. Using catalogs
Victoria’s Secret
4. Using the Internet
Slide12
Channel B
Manufacturer/Producer to Retailer to Consumer
Most commonly used channel for merchandise that dates quickly or needs servicing
Ex:
clothing, automobiles, produce
Slide13
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
EX:
flowers, non-perishable food items, candy
Slide14
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
Slide15
Assignment
Skim through Chapter 21.1 in the textbook and complete the following questions
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DownloadNote - The PPT/PDF document "DISTRIBUTION Chapter 21.1" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Presentations text content in DISTRIBUTION Chapter 21.1
DISTRIBUTION
Chapter 21.1
Slide2What 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
“channels of distribution”
or how they will get the product to the customer
Slide3Channels of Distribution
The path a product takes from its producer (
manufacturer
) to the final user (
the customer
)
Slide4Intermediaries
Move products from the manufacturer to the final user
Also known as middlemen
Classified based on whether or not they take
ownership
of the product
Slide5Intermediaries
Merchant Intermediaries
– take ownership
Agents
– do not take ownership
Slide6Channel Members
Wholesalers
–
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
Slide7Channel Members
Retailers
–
sell goods to the final consumer for personal use
Brick-and-Mortar
–
traditional retailers that sell goods to the customer from their own physical store
Slide8Channel Members
Non-store Retailing
Automatic Retailing (vending machines)
Independent Sales
Catalog Retailing
E-tailing (online retail)
TV home shopping
Slide9Channel Members
Agents
-
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
Slide10Channels in the Consumer Market
Slide11Channel 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
Telemarketing
3. Using catalogs
Victoria’s Secret
4. Using the Internet
Slide12Channel B
Manufacturer/Producer to Retailer to Consumer
Most commonly used channel for merchandise that dates quickly or needs servicing
Ex:
clothing, automobiles, produce
Slide13Channel 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
EX:
flowers, non-perishable food items, candy
Slide14The 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
Slide15Assignment
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