DISTRIBUTION DECISIONS

WEL COME : 

WEL COME

BY- Dhaneshwar Choudhary : 

BY- Dhaneshwar Choudhary DISTRIBUTION DECISIONS

DISTRIBUTION + DECISIONS : 

DISTRIBUTION + DECISIONS DISTRIBUTION: The commercial activity of transporting and selling goods from a producer to a consumer Eg.- the distribution of papers among students. DECISION: a position or opinion or judgment reached after consideration

DISTRIBUTION DECISIONActivities involved in making products available to customers when and where they want to purchase them. : 

DISTRIBUTION DECISIONActivities involved in making products available to customers when and where they want to purchase them. DISTRIBUTION Elements

Q.1 Institutional Distribution………….?Q.2 Physical Distribution……………….? : 

Q.1 Institutional Distribution………….?Q.2 Physical Distribution……………….? 1."Institutional" distribution - definition The middleman between producer and end consumer who may take title and change the form of the product handled. e.g. wholesaler, retailer,agents,distributors etc. 2. "Physical" distribution - definition The logistics of the distribution system including transport, storage and order processing. Distribution is called third”P”(place) in marketing.

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Marketing distribution

DISTRIBUTION CHANNEL SYSTEM : 

DISTRIBUTION CHANNEL SYSTEM A channel is an institution through which goods and services are marketed. Channels give place and time utilities to consumers. In order to provide these and other services, channels charge a margin. The longer the channel the more margins are added. a system where all distribution decisions, including the purchasing of raw materials and parts, as well as the movement of finished products, are taken globally

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13- 8 Vertical Marketing Systems Vertical Marketing Systems (VMS) Corporate VMS Contractual VMS Administered VMS Retailer Cooperatives Franchise Organizations Wholesaler Sponsored Voluntary Chain Service-Firm- Sponsored Franchise System Manufacturer- Sponsored Wholesaler Franchise System Manufacturer- Sponsored Retailer Franchise System

1.Vertical marketing system (VMS) –It is one in which the main members of a distribution channel—producer, wholesaler, and retailer—work together as a unified group in order to meet consumer needs. : 

1.Vertical marketing system (VMS) –It is one in which the main members of a distribution channel—producer, wholesaler, and retailer—work together as a unified group in order to meet consumer needs. 2.Conventional marketing systems- producers, wholesalers, and retailers are separate businesses that are all trying to maximize their profits.

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13- 10 Conventional V/s Vertical Marketing System

PURPOSE OF DISTRI. DECISIONS:-1.Make Availability of product in good No. & at the right time in the target market. 2. To decide the path or route for the goods & services.3.Smooth movement of the product and ownership from manufacturer to the customers.4. cost effective and economic distribution.5. For control of intermediaries.6. It helps to avoid an expensive affair of direct marketing/distribution channel.7.Information communication from the producer to the consumer. : 

PURPOSE OF DISTRI. DECISIONS:-1.Make Availability of product in good No. & at the right time in the target market. 2. To decide the path or route for the goods & services.3.Smooth movement of the product and ownership from manufacturer to the customers.4. cost effective and economic distribution.5. For control of intermediaries.6. It helps to avoid an expensive affair of direct marketing/distribution channel.7.Information communication from the producer to the consumer.

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Those decisions involving the development of new marketing channels where none had existed before, or the modification of existing channels Channel Design

DISTRIBUTION CHANNEL ALTERNATIVES : 

DISTRIBUTION CHANNEL ALTERNATIVES Producer Consumer Intermediaries

Factors affecting channel choice : 

Factors affecting channel choice Market factors- competitors, geography, Economy. Product factors- life cycle, size & weight, product value, consumer perceptions, product complexity. Manufacturer factors- company objective & Resources, Desire for control,Breadth of product life. Organization objectives mass appeal and rapid marketing. buying habit of customers- Understanding consumer needs and criteria for buying Channel Availability - Channels may not be available

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13- 15 Distribution Channel Functions Contact Financing Information Risk Taking Promotion Matching Negotiation Physical Distribution All Use Up Scarce Resources All May Often Be Performed Better Through Specialization All Can Often Be Shifted Among Channel Members

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13- 16 Channel Design Decisions* Analyzing Consumer Service Needs Setting Channel Objectives & Constraints Identifying Major Alternatives Selecting the Best Alternative Responsibilities of Channel Members Evaluating the Major Alternatives

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13- 17 Step 1: Analyzing Consumer Needs Cost and feasibility of meeting needs must be considered Step 2: Setting Channel Objectives Set channel objectives in terms of targeted level of customer service Many factors influence channel objectives Channel Design Decisions

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13- 18 Step 3: Identifying Major Alternatives Channel Design Decisions Types of Intermediaries Company sales force Manufacturer’s agency Industrial distributors

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13- 19 Step 4: Evaluating Major Alternatives Economic criteria Sales, costs, profitability Control issues Adaptive criteria Channel Design Decisions

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13- 20 Evaluating Channel Members Performance should be checked against standards Channel members should be rewarded or replaced as dictated by performance Channel Management Decisions

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13- 21 Channel Management Decisions Selecting Motivating Evaluating FEEDBACK

Channels Conflict : 

Channels Conflict When one Party perceives the behavior of another party in the social system to be impeding the attainment of its goals, a state of conflict exists.

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Conflict Compared to Competition Competition Object centered Indirect Impersonal Conflict ≠ Competition Conflict > Competition Conflict Direct Personal Opponent centered

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Causes of Channel Conflict Role Incongruities Resource Securities Perceptual Differences Expectational Differences Decision Damping Disagreements Goal Incompatibilities Communicational Difficulties

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4 Conflict & Channel Efficiency Can conflict increase efficiency? Does conflict decrease efficiency? Does conflict have any affect? How does conflict affect channel efficiency?

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4 Effects of Channel Conflict Negative Effect: Reduced Efficiency As the level of conflict increases, Channel efficiency declines

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4 Effects of Channel Conflict No Effect: Efficiency Remains Constant Exists in channels characterized by high level of dependency among members Channel efficiency is not affected

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Effects of Channel Conflict 4 Positive Effect: Efficiency Increased Conflict might be impetus for either or both members to reappraise their policies Channel efficiency increases

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4 Detecting Channel Conflict Regularly survey other members’ perceptions of firm’s performance Perform marketing channel audit Form distributors’ advisory councils or channel members’ committees OR OR

Multilevel Marketing/Network Marketing Definition:- : 

Multilevel Marketing/Network Marketing Definition:- A compensation system within direct selling, where a distributor/salesperson can earn money not only on their own personal sales, and not only on the sales of a person personally recruited by them, but also on sales of persons recruited by their personal recruits

Multi-Level/Network Marketing : 

Multi-Level/Network Marketing A marketing system where individual direct sellers recruit, train and develop a team of product users These new direct sellers also recruit, train and develop their own team of product users, who also recruit, train and develop their own team … BASIC CONCEPT is that any individuals sales performance can be multiplied by using the efforts of others through a network of people who work directly for themselves and indirectly for the person who introduced them into the network

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THANK you. Any Question..??