Marketing Distribution

Good afternoon, everyone! I am and I will be discussing about Marketing Distribution.
Today, the majority of producers do not sell directly to customers. Various marketing entities act as
intermediaries to bring their products to the end-users or the consumers. The company that spreads
its products wider and faster into the market place at lower costs than its competitors will make
greater margins absorb raw material price rise better and last longer in tough market conditions.
What are Intermediaries?
Intermediaries act as middlemen between different members of the distribution chain, buying from
one party and selling to another. They also may hold stock and carry out logistical and marketing
functions on behalf of manufacturers.
There are four main types of intermediaries, they bear a variety of names such as agents/brokers,
wholesalers, retailers—or simply distributors. These distribution channels minimize the gap between
point of production and point of consumption, and thereby create place, time and possession utilities.
Agents/Brokers
Thus, while they do not own the product directly, they take possession of the product in the
distribution process. They make their profits through fees or commissions.
Wholesalers
Wholesalers do not work with small numbers of product: they buy in bulk, and store the products in
their own warehouses and storage places until it is time to resell them. Thus, they do not operate on a
commission system, as agents do.
Distributors
Distributors function similarly to wholesalers in that they … However, the key difference is that
distributors ally themselves to complementary products. For example, distributors of Coca Cola will
not distribute Pepsi products, and vice versa. In this way, they can maintain a closer relationship with
their suppliers than wholesalers do.
Retailers
Retailers come in a variety of shapes and sizes: from the corner grocery store, to large chains like
Wal-Mart. Whatever their size, retailers purchase products from market intermediaries and sell them
directly to the end user for a profit.
Also, there are three approaches to distribution
Mass Distribution
Snack foods and beverages, for example, are sold through a number of venues such as
supermarkets, convenience stores, vending machines, cafeterias, and others. The distribution
channel of choice is tilted toward those that can deliver mass markets in a cost-effective way.
The majority of stores carry the producer's items. This technique is typical for mass-produced items
such as household supplies, snack foods, magazines, and soft drink beverages.
Selective Distribution
A luxury electrical products manufacturer, for example, may choose to work with department shops
and independent outlets that can provide the additional value service level necessary to support the
product. Dr Scholl orthopedic shoes, for example, exclusively sell via pharmacies since this sort of
intermediary promotes the product's ideal therapeutic placement. Some premium cosmetics and
skincare manufacturers, such as Estee Lauder, Jurlique, and Clinique, require that sales personnel
be educated to utilize the product line. Only qualified physicians will be allowed to market the
manufacturer's products.
The manufacturer is dependent on a few intermediaries to transport their goods. This technique is
often used for more specialized items that are sold through specialist dealers, such as craft tool
brands or big appliances.
Exclusive Distribution
The manufacturer keeps better control over the distribution process when using an exclusive strategy.
The distributor is required to work closely with the manufacturer and provide value to the product
through service level, after sales care, or client support services in exclusive partnerships. This is a
common strategy used by luxury goods sellers such as Gucci.
When a seller decides to enable a single retailer to sell the manufacturer's products, this is referred to
as exclusive distribution.
Why is distribution important?
Distribution would on the face of it seem to be a comparatively simple matter if looked upon as one of
packing and dispatching goods to the purchaser. This is, however, an incomplete concept as
distribution consists in the actual placing of the goods in the hands of the ultimate consumer at the
proper time as well as at the proper price. The function of distribution is often not fully appreciated.
Distribution is frequently believed to mean transport. The true position that the term distribution
covers all the services necessary to place the product in the hands of the consumer.
For product distribution to be truly successful a continuous feedback loop needs to be implemented to
ensure everyone is happy with the process and that any improvements that can be made, are made.
Product distribution is one of the most complex and difficult decisions that a company must make.
Distribution decisions must be made in accordance with a company's overarching strategic vision and
mission. Creating a unified distribution strategy is a fundamental component of strategic planning.

Marketing Distribution

Uploaded by

Copyright:

Available Formats

Marketing Distribution

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Marketing Distribution

Uploaded by

Copyright:

Available Formats

Good afternoon, everyone! I am and I will be discussing about Marketing Distribution.

You might also like