Distribution Strategies.ppt

1 distributionstrategiesfortheasiapacific asia pacificmarketingfederationcertifiedprofessionalmarketercopyrightmarketinginstituteofsingapore 2 outline basicchannels transactioncostscompetitiveadvantageofchannelsaligningchannelswithhowcustomersbuydistributionstrategiese commerce onlinedistributionm commerce 3 introduction marketingchannelsaresetsofinterdependentorganizationsinvolvedintheprocessofmakingaproductorserviceavailableforuseorconsumption philipkotler 4 basicchannelsofdistribution 5 typicaldistributionofdrugs manufacturers marketingagents retailers wholesalers distributors patient publichospitals institutions 6 distributionobjectives minimizetotaldistributioncostsforagivenserviceoutputdeterminethetargetsegmentsandthebestchannelsforeachsegmentobjectivesmayvarywithproductcharacteristicse g perishables bulkyproducts non standarditems productsrequiringinstallation maintenance 7 discussion whatdothesethreecompanieshaveincommon adellcomputerspoems philipssecurities 8 transactioncostbychannels asthevalue addedincreases thecostoftransactionalsoincreasesdirectmarketingchannels lowvalue added lowcostoftransactionse g e commerce telemarketingindirectmarketingchannels mediumvalue added mediumcostoftransactionse g retailstores distributorsdirectsaleschannels highvalue added highcostoftransactionse g ownsalesforce 9 competitiveadvantageofchannels traditionalmeansofachievingcompetitiveadvantageisthroughproductsbutcanbeeasilycopiedlow costasacompetitiveadvantagealsosufferfromsustainabilitybrandsascompetitiveadvantageonlyifyouareastrongbrandmarketersareturningmoreandmoretochannelsasacompetitiveadvantagee g dellcomputersource thechanneladvantagebyfriedmanandfurey 10 aligningchannelswithhowcustomersbuy identifycustomers channelpreferencesandbuyingbehaviortabulatechannelselectiontokeybuyingcriteriaprovideflexiblechanneloptionsmonitor andrespondto changesinbuyingbehaviorsource thechanneladvantagebyfriedmanandfurey 11 exampleofbuyingcriteria buyingcriteriaforflowers priceorderingspeeddeliveryflexibilitypersonalselection customizationexpertadvicechannelappeal attractivenesspurchasingevents 12 distribution scopestrategies exclusivedistributionlimitingthedistributiontoonlyoneintermediaryintheterritoryintensivedistributiondistributefromasmanyoutletsaspossibletoprovidelocationconvenienceselectivedistributionappointseveralbutnotallretailers 13 exampleofexclusivedistribution leicawasofficiallyappointedjebsen jebsenmarketingastheexclusivedistributorforsingapore malaysia thailand indonesiaandbruneiamainfactorinchoosingj jwasitsexpertisein high qualitytechnicalproductsontheconsumermarket source smartinvestor singaporeed june2000 14 exclusivedistribution advantages maximizecontroloverservicelevel outputenhanceproduct simage allowhighermarkupspromotesdealersloyalty betterforecasting betterinventoryandmerchandisingcontrolrestrictsresellersfromcarryingcompetingbrands 15 exclusivedistribution disadvantages bettingononedealerineachmarketonlysuitableforhighprice highmargin andlowvolumeproducts 16 exampleofintensivedistribution newspapersmostfastmovingconsumergoodsyouseeinthenewsstandphotoprocessingshops 17 advantages increasedsales widercustomerrecognition andimpulsebuyingdisadvantages characteristicallylowpriceandlow marginproductsthatrequireafastturnoverdifficulttocontrollargenumberofretailers intensivedistribution 18 exampleofselectivedistribution daewoohave2distributorsinsingapore starsauto partofalargerindonesiangroup representsdaewoo straditionallineofsedans homegrownfamily ownedjtamotorsmarketdaewoo soffroadvehicleslikethemussoandkorando andanupmarketmodelcalledthechairman source bt motoring feb4 1999 19 selectivedistribution advantages bettermarketcoveragethanexclusivedistributionmorecontrolandlesscostthanintensivedistributionconcentrateeffortonfewproductiveoutletsselectedfirmscapableofcarryingfullproductlineandprovidetherequiredservice 20 selectivedistribution cont d disadvantages maynotcoverthemarketadequatelydifficulttoselectdealers retailers thatcanmatchyourrequirementandgoals 21 multiple channelstrategy usingtwoormoredifferentchannelstodistributegoodsandserviceswhy permitsoptimalaccesstoeachmarketsegmentincreasemarketcoverage lowerchannelcostandprovidemorecustomizedsellingwhattolookoutfor morechannelsusuallymeansmoreconflictandcontrolproblems 22 complementarychannels eachchannelhandlesaproductorsegmentthatisdifferentornon competinge g toyotalexusmphonlineportalsmagazinedistributions 23 competitivechannels thesameproductissoldthroughtwodifferentandcompetingchannelse g non prescriptivedrugselectronicgoodswhy toincreasesaleswhattolookoutfor overextendingyourselfdealers resentmentcontrolproblems 24 modifyingdistributionstrategies modifywhenthefollowingchangesoccur consumermarketsandbuyinghabitscustomerneedscompetitor sperspectivesrelativeimportanceofoutlettypesmanufacturer sfinancialstrengthsalesvolumelevelofexistingproducts andthemarketingmix 25 channel controlstrategy verticalmarketingsystem vms alsoknownascentrallycoordinated professionallymanagedandcentrallyprogrammednetworksystemstheemergingtrendinaspacreplacingexistingconventionalmarketingchannelsclassifiedintocorporate administeredandcontractualvms 26 channel controlstrategy cont d horizontalmarketingsystemtwoormoreunrelatedcompaniesputtingtogetherresourcestoexploitamarketingopportunityadlercalledthissymbioticmarketing hbrnov dec86 example injapan smallcompaniesformhmsintheformofyugoka 27 e commerce onlinedistribution thesuccessdependsonthecharacteristicsoftheconsumersinthemarketintermsoftheirdispositiontoe commerceandsurfingha