Transcript reporting 7 marketing editing

Chapter 7
Distribution 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 Tan
General 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
Distribution Mix
▶Coverage
•Having the proper types of outlet in Geographical.
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▶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
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
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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
◦Distribution Channel performs the
work of moving products from
manufacturers to final consumers
or business users.
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Manufacturer
Distributor
Exhibit 7-2:
DISTIRBUTI
ON
CHANNELS
Wholesaler
Jobbers
Retailers
End Users
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Distraibutors
Distributors are
appointed to
perform the
distirbution
function for
manufacturers
in making their
products
available.
19
20
Wholesalin
g
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 extruck salesman and delivery helper
saturating a territory with stocks.
An activity involving the
sale of products or service
directly to final consumer.
Distribution Channels
(cont.)
Bryan kyle marajas
Bsba – 2c
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-based
procurement exchange.
HOME DELIVERY
 The process of home delivery:
Evaluation Distributions
Channels
By :Katherine Olid
Cost Efficiency

It is important to
estimate the longterm 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.
Control

As 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 Marketing

Gray marketing
or Parallel
distribution is a
term used to
describe
unauthorized
importation and
distribution of
products bearing
genuine brands
across markets.
Global and Regional Market

One major
trend in
Business is the
regionalization
of markets ,
which will
ultimately lead
to the
globalization of
markets.