Distribution

BMI3C

CHANNELS OF DISTRIBUTION

All businesses need to distribute their product either to a place where a consumer can find it

OR directly to the consumer

IF the consumer has the product, the marketer has been SUCCESSFUL

Components of Distribution

There are two components to distribution selecting, developing, and managing

distribution channels physically distributing goods through those

channels

Channels of distribution

…are the paths of ownership that goods follow as they pass from the producer to the consumer

Channel selection deciding what path a product should take to

reach the target consumer Logistics

arranging for the product to move efficiently, safely, cheaply, and quickly

Possible Channels

Distribution Policies

Intensive Selective Exclusive Integrated

Intensive Distribution

Used if the product is sold everywhere Ex: Coca-cola is found in schools, bus

stations, parks, malls, arenas, cafeterias, grocery stores, drugstores, retail outlets, planes, trains, movie theatres, restaurants, etc.

Selective Distribution

Try to control the distribution of their product

May seek to avoid conflicts in positioning/brand image

If a retailer orders a manufacturer’s product, by law the manufacturer cannot refuse to sell the product to the store without a valid reason

Exclusive Distribution

The manufacturer has made a deal with one or two retailers in a particular area to sell the manufacturer’s product exclusively

This allows the product to have a prestige image and allows the manufacturer to dictate some of the retail strategies.

Ex: High fashion clothing, famous-name watches, luxury giftware

Integrated Distribution

In this case a manufacturer, distributor, or retailer owns both distribution outlets and manufacturing facilities for a product

Ex: IKEA, Lee Valley tools – own and operate their own manufacturing & retail stores

Questions

Pick an item you have on you right now What distribution channels do you think it took

to get to you? Think of an example for each of the four types

of distribution strategy How do you think e-commerce has affected

distribution – especially Exclusive distribution?

Looking ahead…

List as many sources/places you can from which you could buy a product (any product)