The Distribution Channel

Distribution Channel
The Distribution Channel

The chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the allimportant end-user.
Distribution - channel strategy

The following table describes the factors that influence the choice of distribution channel by a business:
Influence Comments
Market factors
An important market factor is "buyer behavior"; how do buyers want to purchase the product? Do they prefer to buy from retailers, locally, via mail order or perhaps over the Internet? Another important factor is buyer needs for product information, installation and servicing. Which channels are best served to provide the customer with the information they need before buying? Does the product need specific technical assistance either to install or service a product? Intermediaries are often best placed to provide servicing rather than the original producer - for example in the case of motor cars. The willingness of channel intermediaries to market product is also a factor. Retailers in particular invest heavily in properties, shop fitting etc. They may decide not to support a particular product if it requires too much investment (e.g. training, display equipment, warehousing). Another important factor is intermediary cost. Intermediaries typically charge a mark-up" or "commission" for participating in the channel. This might be deemed unacceptably high for the ultimate producer business.
Producer A key question is whether the producer has the resources to factors perform the functions of the channel? For example a producer may not have the resources to recruit, train and equip a sales team. If so, the only option may be to use agents and/or other distributors. Producers may also feel that they do not possess the customerbased skills to distribute their products. Many channel intermediaries focus heavily on the customer interface as a way of creating competitive advantage and cementing the relationship with their supplying producers. Another factor is the extent to which producers want to maintain control over how, to whom and at what price a product is sold. If a manufacturer sells via a retailer, they effective lose control over the final consumer price, since the retailer sets the price and any relevant discounts or
Marketing Management 1|Page
promotional offers. Similarly, there is no guarantee for a producer that their product/(s) are actually been stocked by the retailer. Direct distribution gives a producer much more control over these issues.
Product factors
Large complex products are often supplied direct to customers (e.g. complex medical equipment sold to hospitals). By contrast perishable products (such as frozen food, meat, bread) require relatively short distribution channels - ideally suited to using intermediaries such as retailers.
Distribution Intensity
There are three broad options - intensive, selective and exclusive distribution: Intensive distribution aims to provide saturation coverage of the market by using all available outlets. For many products, total sales are directly linked to the number of outlets used (e.g. cigarettes, beer). Intensive distribution is usually required where customers have a range of acceptable brands to choose from. In other words, if one brand is not available, a customer will simply choose another. Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g. training) on them. Selective distribution works best when consumers are prepared to "shop around" - in other words - they have a preference for a particular brand or price and will search out the outlets that supply. Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area.
Marketing Management
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Company Name Product Category Products
Acer Electronic Goods/Brand Computer Netbooks Notebooks Desktops Servers TFT LCD Monitors
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ACER in Bangladesh
Executive Technologies Ltd starts business with the one of famous Computer manufacturing company ACER in Bangladesh. In 2008, Executive Technologies Ltd becomes the Bangladesh Region Business Partner from ACER Inc. By the side of ACER Executive Technologies Ltd starts selling ACERs product with the same brand image and slogan- Empowering People.
Distribution Channel followed by ACER in Bangladesh

ACER that means Executive Technologies Ltd wants to sell PCs in Bangladeshi market into two ways. Acer Mall (Exclusive Acer Showroom) sell Acer product directly to the customer. On the other hand customer can purchase Acer product from their authorized dealer.
Acer Mall (Exclusive Acer Showroom)

ACER (Executive Technologies Ltd) has three Acer Mall (Exclusive Acer Showroom) in Bangladesh.
Acer Mall (Exclusive Acer Showroom) # 1 : House 121/D Road 44, Gulshan Avenue (Opposite Wonderland) Acer Mall (Exclusive Acer Showroom) # 2 : KA-3/1C Bashundhara Road (Near Bashundhara F/A Main Gate) Acer Mall (Exclusive Acer Showroom) # 3 : Alta Plaza, House1, Road 10, Mirpur Road (Opposite Kalabagan Bus Stop)
Branch Office
Authorized Dealer collects their product form the branch office of ACER (Executive Technologies Ltd). ACER Branch Office- Shop # 4, Level-4, Multiplan Center Elephant Road
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Authorized Dealer
Acer has a number of authorized dealers in Bangladesh.
Dhaka
IDB Bhaban * Rashit Computers Ltd. * Ryans Computer * Technoedge Corporation Ltd. * Computer Village * ABC Computer Corner * The Accsees Pvt. Ltd. * Advent Technology Multiplan Center * ABC Computer Corner * C&C Trade International * Computer Village * Star Tech & Engineering Ltd. * Tech Hill
Chittagong
* Computer Village Chowmohani * GEC More * Rishit Computer Ltd.
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Price Line
Name of Product Price of Manufacturer (US $) Price of Business Partner Wholes ale 71,800 71,800 62,800 59,800 45,800 32,800 Custom er 74,800 74,800 65,800 63,800 49,800 35,800 Price of Dealer Wholesal e 73,800 73,800 64,800 62,800 48,800 35,800 Custo mer 74,800 74,800 65,800 63,800 49,800 35,800
Acer Aspire 6930 Acer Aspire 2930 Acer Aspire 4935 Acer Extensa 4630 Acer Extensa 4630Z Acer Aspire One
699 699 620 550 499 375
* All prices without manufacturer price consider here BDT (Including VAT).
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The Distribution Channel

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Distribution Channel

The Distribution Channel

Distribution - channel strategy

Company Name Product Category Products

Distribution Channel followed by ACER in Bangladesh

Acer Mall (Exclusive Acer Showroom)

* Computer Village Chowmohani * GEC More * Rishit Computer Ltd.

699 699 620 550 499 375

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