Chapter 7 Distribution Strategy and The Strategic Selling Cycle

Chapter 7Distribution

Strategy and The Strategic Selling

Cycle

“Distribution’s [main] role is to provide an effective link between production and the target consumer. In today’s environment, the main question is who will perform this task and how will it be executed given the

new tools of technology and management.”

-Cristina TanGeneral Manager, Suy Sing Commercial

Edgar “injap” sia II

• Mang inasal marketing’s program is like an archer who is aggressive, determined, confident, and precise in aiming at targets and with a speed like an arrow in reaching goals compared to those of the more established players.

Distribution strategy and the strategic cycle

Six Elements:

1. Coverage – Having the proper types of outlet in a geographical

area is important.

Placement – A product has placement when it is carried in a store. Placement

objectives or having a right target number of outlets ensure customer’s

utmost convenience.

Volume – the right inventory level at the stores is critical.

Chapter 7

Distribution Strategy and The Strategic selling Cycle

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▶Coverage •Having the proper types of outlet in Geographical.

Distribution Mix

▶Placement •Having a right target number of outlets to ensure

customer’s utmost convenience

•Place utility for consumer convenience calls for intensive distribution so that customers may get the product where

they want them

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Volume•The right inventory level in the stores is

critical

•Too much inventory or “overloading” the outlets, is unhealthy as it goes against how a channel member normally earns a profit.

•Small amount of inventory may result in out of stock situations

Display•The right shelf and off-shelf locations plus adequate display space assure marketers a higher probability

that consumers will choose their brand over competition

PRICING

•Having the right resale promotes healthy competition among dealers

•Price wars are usually avoided, as dealers do not gain anything in the end

GOODWILL•Refers to the best relationship between

a supplier and his channel members•Enables marketers to have good display space, and in some cases

enables firms to have advanced notice about impending competitive promotional activities or price

movements

DISTRIBUTION CHANNELS

Chapter 7

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◦Distribution Channel performs the work of moving products from manufacturers to final consumers or business users.

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Manufacturer

Distributor

Wholesaler

Jobbers

Retailers

End Users

Exhibit 7-2:

DISTIRBUTION

CHANNELS

Distraibutors

Distributors are appointed to perform the distirbution function for manufacturers in making their products available.

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Wholesaling

Wholesaling are activities of persons or organizations that sell to those who buy for resale or business use.

• Located in Tondo, Manila• There are several

wholesalers located in divisoria and some manufacturers because of their lenient credit policy.

Wholesalers who also provide warehousing space for manufacturers

and distribution.

they are usually appointed in areas where a firm does not have economies

of scale.

a sales operation where the ex-truck salesman carries stocks in his van or small truck,

saturates a given territory regularly by selling his stocks on “cash” basis and delivers the

stocks immediately upon order.

Ex-tuck selling is usually the entry-level activity of new salesmen.

Some manufacturers or wholesalers/distributors are using the feeder

model.

Here, instead of a two-man team of the ex-truck salesman and delivery helper saturating a territory with stocks.

An activity involving the sale of products or service directly to final consumer.

Bryan kyle marajasBsba – 2c

Distribution Channels

(cont.)

FRANCHISING

An accelerated method to expand distribution coverage is thru franchising.

In this method, a franchise fee is paid to the franchise owner in exchange of an established brand name, a proven system of operation, training, and other infrastructure support.

It is said that franchising offers a high 90% success rate, but it must be based on having the right location.

FRANCHISING

In 2007, TGP took 3 years to build a chain of 1,000 stores what took industry leader Mercury Drug 6 decades to build.

DIRECT SELLING

Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location.

Network Marketing (type of direct selling compensation scheme) is also known as the “People’s Franchise.”

DIRECT SELLING

Some members of the Direct Selling Association of the Philippines (DSAP):

DIRECT SELLING

The DSAP has over 2M “foot soldiers” acting as their distribution network.

They also try to protect consumer rights and fights pyramiding companies that use network marketing as their front. Others hide their scam by offering products of no real world value.

INTERNET

E-business has been widely known since the 90’s. No longer are companies limited to sell products through stores or direct sales.

INTERNET

Business-to-business marketing is also giving a different face to the selling process as companies realize that substantial money and time can be saved from the paperless e-marketplace.

The Philippines’first internet-basedprocurement exchange.

HOME DELIVERY

The process of home delivery:

Evaluation Distributions Channels

By :Katherine Olid

Cost EfficiencyIt is important to

estimate the long-term impact of having one`s own sales force and appointing a distributor. Once sales vol. increase to as economic level ,having one`s sales force may be cost-efficient.

ControlAs distributors

are not the company`s employees, they may have different priorities. Profit may be their main obj. while the firm`s obj. may be market shares.

Channel Modification

The marketplace is ever changing. The flexibility to modify distribution may be need.

BACKWARD DISTRIBUTION

Marketing channels usually describe forward movement of products from manufacturers to ultimate consumers.

Gray MarketingGray marketing

or Parallel distribution is a term used to describe unauthorized importation and distribution of products bearing genuine brands across markets.

Global and Regional MarketOne major

trend in Business is the regionalization of markets , which will ultimately lead to the globalization of markets.