Lesson Plan
Course Title – Marketing Dynamics Unit 2, Lesson 3
Session Title – Channels of Distribution
Performance Objective:
After completing this lesson, students will be able to understand the channels of distribution,
evaluate a distribution plan, identify physical distribution activities, and determine costs
associated with distribution.
Approximate Time:
When taught as written, this lesson should take three to four days to complete.
Specific Objectives:
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Students will be able to compare and contrast the advantages and disadvantages of
market segmentation and mass marketing.
Students will be able to distinguish among geographic, demographic, psychographic,
and behavior segmentation.
Students will be able to explain the nature of marketing planning.
Terms:
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Channel of Distribution
Intermediaries
Direct Distribution
Indirect Distribution
Exclusive Distribution
Franchises
Integrated Distribution
Selective Distribution
Intensive Distribution
E-Commerce
Methods of Transportation
For-Hire Carrier
Contract Carrier
Small Package Carrier
Bus Carrier
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Preparation
TEKS Correlations:
This lesson, as published, correlates to the following TEKS. Any changes/alterations to
the activities may result in the elimination of any or all of the TEKS listed.
130.347 (c)(20)(A)
…identify physical distribution activities …
130.347 (c)(20)(B)
… determine costs associated with distribution …
130.347 (c)(9)(A)
… understand channels of distribution …
130.347 (c)(9)(B)
… evaluate a distribution plan …
Interdisciplinary Correlations:
English:
110.31 (b)(21)(B)
… organize information gathered from multiple sources to create a variety of graphics
and forms (e.g., notes, learning logs)…
110.31 (b)(22)(B)
…evaluate the relevance of information to the topic and determine the reliability, validity,
and accuracy of sources (including Internet sources) by examining their authority and
objectivity…
110.31 (b)(23)(C)
… use graphics and illustrations to help explain concepts where appropriate…
110.31 (b)(23)(D)
… use a variety of evaluative tools (e.g., self-made rubrics, peer reviews, teacher and
expert evaluations) to examine the quality of the research…
Occupational Correlation (O*Net - http://www.onetonline.org/)
Supply Chain Managers - 11-9199.04
Similar Job Titles: Logistics Analysts, Logistics Managers, Storage and Distribution
Manager, Transportation, Storage, and District Managers
Copyright © Texas Education Agency (TEA)
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Tasks:
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Confer with supply chain planners to forecast demand or create supply plans that
ensure availability of materials or products.

Monitor forecasts and quotas to identify changes or to determine their effect on
supply chain activities.
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Define performance metrics for measurement, comparison, or evaluation of
supply chain factors, such as product cost or quality.
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Analyze inventories to determine how to increase inventory turns, reduce waste,
or optimize customer service.
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Develop procedures for coordination of supply chain management with other
functional areas, such as sales, marketing, finance, production, or quality
assurance.
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Negotiate prices and terms with suppliers, vendors, or freight forwarders.

Meet with suppliers to discuss performance metrics, to provide performance
feedback, or to discuss production forecasts or changes.

Implement new or improved supply chain processes.

Design or implement supply chains that support business strategies adapted to
changing market conditions, new business opportunities, or cost reduction
strategies.
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Manage activities related to strategic or tactical purchasing, material
requirements planning, inventory control, warehousing, or receiving.
Soft Skills:
Active Listening, Reading Comprehension, Critical Thinking, Speaking, Coordinating,
Active Learning.
Teacher Preparation:
Teacher will review the terms in the outline, digital presentation slides, and handouts to
become familiar with lesson.
Teacher should locate and evaluate various resources and websites before the lesson.
Teacher will have assignments and website information ready to distribute to students.
References:
Marketing Essentials, Schneider Farese, Kimbrell, Woloszyk, Glencoe McGraw-Hill
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Instructional Aids:
1. Display for digital presentation, websites for assignments, and class discussion
2. Marketing Essentials, Schneider Farese, Kimbrell, Woloszyk, Glencoe McGrawHill
3. The Channels of Distribution Crossword direction sheet.
Materials Needed:
1. Printer paper
2. Assignments ready to distribute to students. Channels of Distribution
Crossword.
3. Assignment ready to distribute to students. Distribution Method Comparison
direction sheet.
4. Computers with digital presentation software.
5. Internet for students to research business risks.
Equipment Needed:
1. Computer with digital presentation and Internet Access
2. Projector to Show Internet Sites
3. Computers for Students to Conduct Research
Learner Preparation:
The place decision of the marketing mix involves the place where your product will be
sold. This is also known as distribution. Marketers must decide where their products are
best suited to be sold and how to transport the goods from the producer to the
customer. The product may lend itself to one particular method of transportation more
than another. Marketers must also choose the best distribution method for their
products. Do they want to tightly control were their products are sold, like a designer
handbag, or do they want them to be available at the maximum number of outlets, like
toothpaste?
Introduction
Introduction (LSI Quadrant I):
SHOW: Show students a box of toothpaste.
ASK: Ask students which stores they would go to if they needed toothpaste.
SAY: There are a lot of different stores that you can purchase toothpaste, including
convenience stores, discount stores, grocery stores, even gift shops in hotels.
ASK: Ask students where they would go if they wanted to purchase a pair of designer
shoes.
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SAY: Explain that some designers choose to have tight control over where their
products are sold so they can maintain a certain image.
ASK: Ask students how they think lettuce that is harvested in Mexico is transported to
Texas to be sold in grocery stores.
SAY: Explain that since lettuce is perishable it will have to be shipped on a relatively
fast transportation method.
ASK: Ask students how they computers that are manufactured in China are shipped to
the United States?
SAY: Explain that since computers are not perishable and trains and trucks would not
be able to run between China and the U.S. the computers would probably shipped on
boats.
ASK: Ask students if they have seen the vending machines that sell electronics such
as smartphones and high end head phones.
SAY: Explain that this is a new trend in distribution and are found in most airports now.
By offering the products for sale in places where the customers are likely to purchase
them they are choosing a distribution method that increases their company’s sales.
Outline
Outline (LSI Quadrant II):
Instructors can use the digital presentation, slides, handouts, and note pages in
conjunction with the following outline.
MI
Outline
I.
The channel of distribution is the path
that a product takes from producer to
final user.
A. Intermediaries are those involved
as the product moves from
producer to consumer.
B. Merchant intermediaries take
possession of the product
(wholesalers and retailers).
C. Agent intermediaries do not take
possession.
Copyright © Texas Education Agency (TEA)
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Notes to Instructor
Use digital
presentation and
current events as
aid.
There are multiple
paths that a product
can take from
producer to
consumer. It can go
straight from the
producer to the
consumer or it can
go through several
middlemen first. The
path that it takes is
called the channel of
distribution.
Intermediaries help
to move the product
along to the
E. Rack Jobbers – Wholesalers who
consumer. This
manage inventory, stock when
could be retailer or a
needed and provide racks for
wholesaler. There
displays.
are two types of
F. Drop Shippers – Own the goods but intermediaries,
merchant and agent.
do not physically handle the
Merchant
products.
intermediaries
actually purchase the
product and then
turn around and sell
it to the end
customer. This is
different from agent
intermediaries who
do not take
possession.
D. Wholesalers – Buy large quantities,
store them and then resell them to
other businesses.
Wholesalers buy
large quantities from
the producers and
then turn around and
resell them to other
businesses or to
retail stores. Rack
jobbers are
wholesalers who
bring their
merchandise into
stores, stock the
shelves, and put the
displays up for the
retailers. Drop
shippers purchase
the products from the
producers and turn
around and sell them
to the end
customers, but they
ship the goods to the
customer instead of
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II. Retailers sell goods to the final consumer
for personal use.
A. Brick and Mortar Retailers – Have a
physical store from which they sell
their products.
B. Vending Services – Buy goods and
sell through vending machines.
C. Direct Mail and Catalog – Can be
brick and mortar selling goods to
customers while they are at home,
or Internet sites without a physical
store.
D. Television Home Shopping
Networks – TV stations that sell
products to consumers.
E. E-Tailing – Retailers selling
products over the Internet. Some
are an extension of brick and
mortar business and some are only
found on Internet.
the customer going
to their store.
Use digital
presentation and
current events as aid
Retailers deal
directly with the end
customers. If they
have a store that you
can go to and shop
they are considered
to have a brick and
mortar store. Not all
retailers have a
physical store; there
is a trend to online
only.
Vending services
buy goods from
wholesalers or
producers and then
purchase vending
machines and stock
them with goods.
They must keep
them stocked and
the goods fresh.
Vending machines
are no longer just
used for food items.
There is a growing
trend to sell
electronics in
vending machines
E-tailers sell their
products over the
Internet. Almost all
major retailers now
have websites that
they sell products
through in addition to
their stores.
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III. Brokers – Paid a commission based on a
percentage of the sale price. They
negotiate the sale and then look for other
customers. They are used often in
seasonal products such as food.
IV. Independent Manufacturer’s
Representatives – Represent several
related but not competing manufacturers.
Work independently running their own
business.
V. Distribution Methods
A. Direct Distribution – When goods
and services are sold directly to the
Copyright © Texas Education Agency (TEA)
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Use digital
presentation and
current events as an
aid.
Brokers may put
together a line of
goods that are
related, such as
camping equipment,
and then sell the line
to a retailer that sells
camping equipment.
By putting together
the line from different
producers, they are
making it easier for
the retailers to carry
goods from different
producers without
having to deal with
several different
producers.
Use digital
presentation and
current events as
aid.
An independent
manufacturer’s rep
will carry several
different lines but
they do not work
directly for the
producers. They
work for themselves
and get a
commission of
everything they sell
to the retailers.
Use digital
presentation and
current events as
aid.
customer from the manufacturer.
B. Indirect Distribution – Involves one
or more intermediary between
customer and manufacturer.
C. Exclusive Distribution – Only select
distributors are allowed to sell the
product.
1. Prestige
2. Image
3. Channel control
4. High profit margin
D. Franchises are also an example of
exclusive distribution. Only licensed
franchises can sell the product.
E. Integrated Distribution – When the
manufacturer acts as wholesaler
and retailer for their own products.
F.
Selective Distribution – A limited
number of outlets in a geographic
area are allowed to sell the product.
Those selected must:
1. Be able to maintain an image
2. Be a good credit risk
3. Be aggressive marketers
4. Be good inventory planners
G. Intensive Distribution – Products
are distributed through all suitable
outlets. Goal is to sell to as many
customers as possible.
Direct distribution
sells goods directly
from the producer to
the customer. You
cannot purchase the
goods in retail stores
but must purchase
them directly from a
sales representative.
Indirect has at least
one and maybe more
intermediaries
between the
producer and the
customer. The
intermediary could
be a wholesaler or
an agent or a broker.
Exclusive distribution
is very selective
about who carries
their products. They
want to maintain tight
control over their
product quality and
image. It is also way
to show prestige if
you cannot purchase
the product except at
a few outlets.
In a franchise the
franchisee
purchases the right
to use the logo,
recipes, and
processes from the
franchisor. This is an
exclusive distribution
method.
Integrated
distribution is when
the producer sells
their own products in
Copyright © Texas Education Agency (TEA)
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their own store.
VI. E-Commerce – Products sold to
customers and industrial buyers via the
Internet.
A. Cyber Monday sales topped $1.25
billion in 2011.
B. Online travel increasingly popular.
C. Many retailers moving to B2B
websites to sell products to
industrial customers.
VII. Methods of transporting goods
A. Rail – Piggyback and fishyback.
B. Air – Public and private carriers.
C. Truck – Public and private carriers.
D. Water – Intracoastal and internal
waterways.
E. Pipeline – Used primarily for oil and
gas.
Copyright © Texas Education Agency (TEA)
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Selective distribution
seeks to limit the
number of outlets in
a certain area. This
way the producer
can maintain a
tighter control over
their image and
markets.
Intensive distribution
attempts to put their
product in as many
outlets as possible.
Use digital
presentation as an
aid.
The number of online
only retailers has
greatly increased
since 2000. Cyber
Monday, the Monday
after Black Friday
when brick and
mortar stores kick off
their Christmas
shopping season,
saw a 30% increase
from 2010 to 2011
with sales over $1.25
billion.
Use digital
presentation as an
aid.
A large part of the
decision on how to
ship products will be
dependent upon the
type of product, its
perishability and
where it is being
transported from and
to. A piggyback and
fishyback are
containers that can
be transported by
truck then have their
wheels removed and
G. Common Carrier – Transports
loaded onto ships
products on a specific schedule and
and trains and
according to government
transported. At the
regulations.
final destination the
wheels are put back
H. Contract Carrier – Carrier that
on and then trucked
provides equipment and drivers to
to the end customer.
transport products according to
Air freight can be
negotiated contract.
transported by either
scheduled airlines or
Small Package services
on private carriers.
A. U.S. Postal Service – usually ships Air freight is more
packages meeting certain size and expensive than other
forms of
weight restrictions.
B. Freight Forwarder – Transportation transportation but
can get the goods to
company that pools many smaller
the customer quickly
shipments together to take
when time is
advantage of lower rates.
important or the
C. Express Carrier – transportation
that specializes in delivery of small, product is
perishable.
lightweight packages and highpriority mail. Shipments are usually If a company owns
their own truck fleet,
less than 150 lbs.
then they are a
D. Bus Carrier – Usually packages
private carrier and do
weighing less than 100 lbs via a
not have to schedule
scheduled bus route.
1. Can make same-day or next- shipments. If they do
not own their own
day delivery to small towns
fleet, then they must
and cities.
schedule the
shipment with a
public carrier.
If the cities that the
goods are being
transported to are on
rivers or intracoastal
waterways, then they
can be shipped via
boats. If the goods
are being shipped
F.
I.
For-Hire Carrier – Transportation
company that moves products for
business and charge a fee for
transportation.
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between continents,
then shipping via
boats is a necessity.
Pipelines are used to
transport a large
percentage of oil and
natural gas.
A small package
service handles
small to medium size
packages which are
normally less than
150 lbs. They will
usually pool together
lots of smaller
shipments into a
large shipment and
then transport them
on their trucks to the
final destination. The
postal service and
express delivery
services are
examples of this.
Verbal
Lingui
stic
Logical
Mathema
tical
Visu
al
Spat
ial
Music
al
Rhyth
mic
Bodily
IntraKinesth perso
etic
nal
Interperso
nal
Application
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Natur
alist
Existenti
alist
Guided Practice (LSI Quadrant III):
Students will complete the Channels of Distribution Crossword individually and turn in to the
teacher. The crossword puzzle contains all of the vocabulary words for this lesson.
The crossword will be graded by the Channels of Distribution Crossword Solutions included
with this lesson.
Independent Practice (LSI Quadrant III):
Distribution Methods Comparison (Team project, two to three students per team)
Students will choose a product from the following list. They will research the product
and determine the method of distribution that would be best suited for that product.
They will give a brief explanation of the method that they choose and explain why that
distribution method would be the best for the product. Next they will evaluate the best
method to transport the goods from the manufacturer to the end destination. They
should list the advantages and disadvantages of using this form of transportation.
Product
Where Manufactured
Hybrid cars
Japan
Laptop computers
China
Burgers
Meat produced in Pennsylvania
Electronic books and readers
Books from all over, readers from
California
Children’s play sets (swings, slides, etc.)
Texas
Coffee
Brazil
Students will create a digital presentation with this information and present it to the
class.
The presentations will be presented to the class and graded on the attached rubric.
Summary
Review (LSI Quadrants I and IV):
Question: Why do some producers choose to have their products sold in a very limited
number of outlets?
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Question: Are all products well suited for limited distribution?
Question: What type of products would work well for extensive distribution?
Question: What type of factors do marketers need to consider when choosing their
distribution strategy?
Question: How has the Internet changed distribution for retailers?
Question: Do all retailers need to have a brick and mortar and an E-commerce site?
Question: What advantage would retailers have by having a website?
Question: What is the best way to ship smaller products to a small town in Texas?
Question: How does the perishability of goods affect the shipping method?
Question: What is the most expensive way to ship goods?
Evaluation
Informal Assessment (LSI Quadrant III):
Instructor should observe the work ethic of individuals involved in class discussions and
the Independent Practice activity.
Formal Assessment (LSI Quadrant III, IV):
Students will be evaluated on their Distribution Methods Comparison Presentation
by using the assigned rubric.
Extension
Extension/Enrichment (LSI Quadrant IV):
Distribution Presentation
Students will research each of the transportation methods and provide advantages and
disadvantages of each method. They will compare and contrast and the different
methods and provide examples of products that are well suited for each type of
transportation.
The presentations will be presented to the class.
Copyright © Texas Education Agency (TEA)
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Marketing Dynamics
Unit 2, Lesson 3 Student Directions
Independent Practice (LSI Quadrant III):
Distribution Methods Comparison (Team project, two to three students per team)
Students will choose a product from the following list. You will research the product and
determine the method of distribution that would be best suited for that product. You will
give a brief explanation of the method that you chose and explain why that distribution
method would be the best for the product. Next you will evaluate the best method to
transport the goods from the manufacturer to the end destination (retailer or customer).
You will need to list the advantages and disadvantages of using this form of
transportation.
Product
Where Manufactured
Hybrid cars
Japan
Laptop computers
China
Burgers
Meat produced in Pennsylvania
Electronic books and readers
Books from all over, readers from
California
Children’s play sets (swings, slides, etc.)
Texas
Coffee
Brazil
You will create a digital presentation with this information and present it to the class.
The presentations will be presented to the class and graded on the attached rubric.
Copyright © Texas Education Agency (TEA)
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Independent Practice (LSI Quadrant III)
Distribution Method Comparison Presentation and Collateral Materials
Rubric
20
15
10
5
CATEGORY
Presentation
Well-rehearsed with
smooth delivery that
holds audience
attention.
Rehearsed with fairly
smooth delivery that
holds audience
attention most of the
time.
Delivery not smooth, Delivery not smooth
but able to maintain and audience
interest of the
attention often lost.
audience most of the
time.
Attractiveness
Makes excellent use
of font, color,
graphics, effects,
etc. to enhance the
presentation.
Makes good use of
font, color, graphics,
effects, etc., to
enhance the
presentation.
Makes use of font,
color, graphics,
effects, etc., but
occasionally these
distract from the
presentation
content.
Use of font, color,
graphics, effects,
etc., but these often
distract from the
presentation content.
Content
Covers topic indepth with details
and examples.
Subject knowledge
is excellent.
Includes essential
knowledge about the
topic. Subject
knowledge appears
to be good.
Includes essential
information about
the topic but there
are 1-2 factual
errors.
Content is minimal
OR there are several
factual errors.
Organization
Content is well
organized using
headings or bulleted
lists to group related
material.
Uses headings or
bulleted lists but the
overall organization
of topics appears
flawed.
Content is logically
organized for the
most part.
There was no clear
or logical
organizational
structure; just lots of
facts.
Originality
Product shows a
large amount of
original thought.
Ideas are creative
and inventive.
Product shows some
original thought.
Work shows new
ideas and insights.
Uses other people's
ideas (giving them
credit), but there is
little evidence of
original thinking.
Uses other people's
ideas, but does not
give them credit.
Total Points Earned _______
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