Place & Distribution: Notes Outline
HOW DISTRIBUTION WORKS Chapter 21
This is the __________________ part of the Marketing Mix.
This is where the marketer must decide ____________________________
_____________________________________________________________
To make a _______________________, marketers must decide on their
__________________________________________________________.
This is the path a product takes from ___________________ to
_____________________________________.
When the final user of a product is a business, the product is classified
________________________________________________________________.
When the final use is a person, the product is classified
_________________________________________________________________.
Channel Members: All the businesses involved in sales transactions that move products from
the manufacturer to the final user are called _______________________________ or
________________________.
Intermediaries ______________________________________________ because they often
have ____________________________________ that
_______________________________do not have. Intermediaries
________________________the number of transactions required by manufacturers to reach
their final customers. Intermediaries are classified on the basis whether they take
__________________________ or (__________) of the goods and services.
______________________ Intermediaries take title to goods
Two kinds: ___________________ and ________________________
____________ Intermediaries, called _______________, receive
__________________________________.
_______________________buy ________________quantities of goods (taking title) from
manufacturers, ____________________ the goods, and then _______________________ them
to other businesses. Their customers are called _________________________. They may be
called _________________________when their customers are professional or commercial
users, manufacturers, governments, institutions, or other wholesalers.
Wholesalers
Two specialized wholesalers are:
 rack jobbers ____________________ ____________________ and merchandising for
___________________by ________________ stock, ____________________ it in when
needed, and maintaining store___________________. They provide the display racks
and ________________the retailer only for the goods sold
 drop shippers deal in __________ ___________ such as coal, lumber, and chemicals
that __________________ __________________ ______________________. Drop
shippers _________ the goods to other businesses and have the producer
_______________the merchandise directly to the ____________________. The products
are ____________, but never __________________, by the drop shipper.
Retailers
Retailers ___________ ________________ to the _______________consumer for personal
use. Traditional retailers, called _________________________________________________,
sell goods to the customer from their own ______________stores. TV home shopping
networks combined media and stores to market to mass audiences.
________________________ retailing operations include automatic retailing, direct mail and
catalog retailing, TV home shopping, and _____________retailing (e-tailing). Automatic
retailing – vending services or automated distribution centers
Agents
 Unlike wholesalers and retailers, agents _______ _________ ___________ the goods
they sell. Agents act as intermediaries by bringing ______________ _____
_______________________ together. Examples Real estate agents, food brokers,
independent manufacturer’s representatives.
Brokers
 Principal _______ is to bring buyers and sellers together in order for the _________ to
take place. ___________ have a continued ___________________. They
___________________ the sale, receive a ______________________, then look for
other customers and the next sale.
Direct or Indirect Channels
Channels of distribution are classified as direct or indirect.
Direct distribution occurs when the __________ ____ _______________ are sold from the
_____________ __________________ to the customer; no
___________________________are involved.
Indirect distribution involves ________ ___ ____________ intermediaries.
Channels in the Consumer and Industrial Markets
________________channels of distribution are generally used to reach the customer in the
consumer and industrial markets. ______ markets make use of direct and indirect distribution.
Channels of Distribution
.
Why Distribution is Important
Distribution decisions affect the ________________ ____________________ so it is important
for you to __________ _________ ________ ____________ __________ . It is also helpful to
know how they are _______________ ________ in different markets, including
_______________________ and e-marketplaces.
Distribution Planning
Distribution planning involves ___________________ about a product's
____________________ _______________________ and __________________ of
_______________________ from producer to consumer. Distribution decisions affect a firm's
_______________________ program. Some of the major considerations are:
 the use of _______________ _________________________
 ________________ vs. costs
 ____________________________ of distribution desired
 involvement in _____________________________________
Multiple Channels
 Multiple channels are used when a product fits both industrial and customer markets.
Example: __________________sold to supermarkets and airlines.
 Retailers can use multiple channels: Example: _______________________
_______________ sells to the public and sells office supplies to businesses.
Control vs. Cost
All manufacturers and producers must ___________ ________ ________________ they want
to keep over the distribution of their products against ___________ and
_____________________. Decisions can involve:
 using an ________________________________or independent ______________
_____________________
 A direct sales force is ___________________. Because you have just added
______________, _______________, ____________________
 using agents, which means ___________ ________ _________________ over how sales
are made
 Agents interests _______ _______ ___________ be the same as ours
Who Does the Selling?
A _________________________________ can decide to use its own ________
________________ or _______________ ____________________ to do the
____________________, depending on how much control it wants over sales.
 Direct Sales Force: _____________________; manufacturer maintains complete
_________________________.
 Agents: _________ _______________; manufacturer ___________ some control over
how sales are made.
Who Dictates the Terms? Retail giants like Wal-Mart and Home Depot ___________
______________________ to adhere to _________________ _______________ regarding
_____________, ________________, _______________, and merchandising. Some
manufacturers adhere to these wishes because of the large _________________ ___
____________________ generated by the retail giants; some prefer to
______________________products through smaller retailers.
Distribution Intensity
Distribution intensity has to do with how ________________ a product will be distributed.
There are three levels of distribution intensity:
 ___________________________________________________
 ______________________________________________
 __________________________________________
Exclusive Distribution: involves ________________ _____________________ for
distribution of a product in a ___________________________ _________.
 Example: Retailers associated with National Auto Parts Association (NAPA) buy
stock from NAPA and participate in its promotions.
Integrated Distribution is ___________ _________ ______________ __________________
________________ as or done by the Manufacture.
 Items such as Old Navy branded clothing is only found at Old Navy stores.
o If you want to buy these items you must go to the place of manufacture or to a
store owned by the manufacture.
o Integrated = _______________ _________________________
Selective Distribution means that a ________________ _________________ _____
______________________ in a given geographic area are used to ________ ________
_______________________.
 Example: Ralph Lauren selects only top department and specialty stores to sell its
products.
Intensive Distribution involves use of ________ ______________ ______________ for a
product. The objective is __________________ market __________________, and the
ultimate goal is to _________ l.as many customers as possible.
 Example: Motor oil is sold in supermarkets, farm stores, parts retailers, hardware
stores, warehouse clubs, and even mini marts.
Distribution Methods
• Most frequently used transportation
 ___________________________
• High initial cost but lower operational costs
 __________________________________
• Cheapest and slowest form of transportation
 __________________________________
• Most expensive but fastest form
 __________________________________
E-Commerce is the means by which products are sold to customers and industrial buyers
through ________ ____ ______ _________________________. In 2010 almost
_______________ of America's top retailers sold online.
____________________ use the Web to sell to consumers and to facilitate industrial sales.
Example: Panasonic uses its public Web site for information only, but it has a B2B web site
where retailers can check orders, pricing, and promotions.
Legal & Ethical Issues Related to Distribution
The Clayton Antitrust Act of 1914: _____________________________________
__________________________ that prevent _____________ ________________.
The Sherman Antitrust Act: _______________________ ____________________.
Distribution Planning for Foreign markets
Distribution planning takes on a new dimension when businesses get involved in
____________________ _______________. Different environments in foreign markets require
that businesses ____________________their distribution systems. This also gives businesses
the opportunity to ______________________ with different _______________________
strategies.