Exploring the fundamentals of distribution within supply chain management, this overview covers the strategic use of distribution channels, the role of intermediaries, and the impact on the marketing mix. It delves into global distribution considerations, classifies channels by direct and indirect methods, and discusses the importance of tailoring distribution strategies to market needs. The text also examines the factors influencing distribution decisions and the significance of these decisions in reaching consumers effectively.
Show More
Distribution channels are carefully chosen routes that products follow, potentially through intermediaries, to efficiently and punctually deliver products to consumers
Role of Intermediaries
Intermediaries bridge the gap between manufacturers and consumers by purchasing goods from producers and reselling them to end-users, expanding the market reach of products and services
Utilizing Intermediaries
Utilizing intermediaries can lead to cost savings in marketing and logistics for companies, but may result in commissions and a potential reduction in control over the customer experience and brand representation
Distribution has a profound impact on how a product is perceived by consumers, with limited distribution creating an aura of exclusivity and widespread availability positioning a product as a common good
International distribution requires a strategic approach, involving decisions such as identifying suitable products for international markets, navigating logistical challenges, and determining the degree of control over the distribution process
Dedicated International Divisions
Companies may establish dedicated international divisions to handle distribution in foreign markets
Collaboration with Local Distributors
Companies may collaborate with local distributors to penetrate foreign markets
E-commerce
Companies may leverage e-commerce to reach customers in foreign markets
Decisions regarding international distribution are influenced by factors such as market size, product characteristics, and consumer demographics
Distribution channels are categorized as direct or indirect, with direct channels involving sales from producers straight to consumers and indirect channels incorporating intermediaries such as wholesalers and retailers
Dual distribution combines direct and indirect channels to optimize market penetration
Reverse logistics deals with the return of goods from consumers to businesses for purposes such as recycling or refurbishment
The selection of a distribution level and strategy is influenced by market size, product characteristics, and consumer demographics, with each level reflecting the number of intermediary stages a product passes through before reaching the consumer
Distribution decisions are shaped by factors such as the nature of the product, market conditions, consumer preferences, and the scale and financial capacity of the manufacturer
Intensive Distribution
Intensive distribution seeks to maximize product availability and is ideal for everyday consumer goods
Selective Distribution
Selective distribution focuses on placing products in specific, often premium, outlets and is suitable for specialized items
Exclusive Distribution
Exclusive distribution limits product availability to single or very few outlets and is typically used for luxury goods
Distribution decisions have a significant impact on consumer access and brand perception
00
The main goal of ______ channels is to ensure products are delivered ______ and on ______, maintaining the supply chain's ______.
distribution
efficiently
time
effectiveness
01
Intermediaries' impact on market reach
Expand product/service market by connecting producers with more consumers.
02
Intermediaries' effect on company costs
Reduce marketing/logistics expenses but may incur commissions, affect customer experience control.
