Place
Considerations in Distribution

• What are channels of distribution?
• What are intermediaries?
• What are two types of intermediaries?
• Name two agent intermediaries?

• Identify and discuss levels of intensity of distribution
• Identify advantages and companies sales force vs. agents.

Key questions manufacturers or producers must make concerning distribution
• How widely can we distribute our products?
– What outlets will be used?
• How will we sell our products to these outlets?
– Will we use a sales force or intermediaries?
• How much control will we want over our products in store?
• How much are we willing to spend on getting our products to market?

Distribution intensity: How widely a product will be distributed.
Levels of distribution intensity:
• Intensive Distribution
• Selective Distribution
• Exclusive Distribution
• Integrated Distribution

• Use all suitable outlets (complete market coverage)
• Sell to as many customers as possible
– Wherever they shop
Products include:
Convenience or everyday goods
Frequently purchased goods

• Use of limited outlets within a given geographic area
• Select retailers that maintain the image of the product and are willing to promote it
• Examples include: Malls, Department Stores, Specialty
Stores
Products include:
Clothing
Appliances
Furniture

• Use of only one dealer within a geographic area
– Dealer is usually granted exclusivity rights and only carries that one brand of a particular product
• Retailer and producer retain prestige, image, channel control, and high profit margin
Products include:
Franchises
Car Dealers
NAPA Auto Parts Dealers

• Manufacturer owns and runs the retail store
• Offers complete control of the products and consumer shopping experience
• Includes outlet stores

Key questions manufacturers or producers must make concerning distribution
• How widely can we distribute our products?
– What outlets will be used?
• How will we sell our products to these outlets?
– Will we use a sales force or intermediaries?
• How much control will we want over our products in store?
• How much are we willing to spend on getting our products to market?

Advantages
• More control
– Set sales quotas
– Maintain inventories
– Execute sales promotions
• Act as ambassadors
Disadvantages
• Costs more to maintain
– Salaries
– Benefits

Advantages
• Not on payroll
• Handle simple in-store execution
• Established a relation ship with retailer
Disadvantages
• Not on your payroll
• Less control
– Little control of scheduling
– Limited execution
• Not an ambassador for your products

• What is distribution intensity?
• What is the difference between exclusive distribution and selective distribution?
• What are some of the advantages of having an in house sales dept?
• What are some of the advantages of using brokers?