PUC Siem Reap Campus Panññāsāstra University of Cambodia Committed to Excellent សីល សមាធិ បញ្ញា Part 4 Present by: #Group 4 SOTH Bun Heng YIN Sreynuth PEOU Kimhouy Chapter 11# Deliver the Goods: Determines Distribution Strategy Lecturer : Keara PHANN Contents Types of Distribution Channel and Wholesale Intermediaries • Functions of Distribution Channels • Wholesaling Intermediaries Develop a Channel Strategy • Step 1: Develop distribution objectives • Step 2: Evaluate Internal and External Environmental Influences • Step 3: Choose a Distribute Strategy • Step 4: Develop Distribution Tactics Logistic and the Supply Chain • Order Processing • Warehousing • Transportation • Supply Chain • Inventory Control Chapter Objectives • Explain what a distribution channel is, identify types of wholesaling intermediaries, and describe the different types of distribution channels • List and explain the steps to plan a distribution channel strategy • Discuss the concepts of logistics and supply chain Types of Distribution Channel and Wholesale Intermediaries Distribution Channels Functions of Distribution Channels: • Channel provide the place, Time, and possession utility. They make desired products, available when, where, and in the sizes and quantities that customer desire. • Distribution Channels provide a number of logistics or physical distribution functions that increase the efficiency of the flow of goods from producers to customer. Distribution Channels Function of physical distribution Distribution Channels Channels of distribution is a series of firms or individuals that facilitates the movement of a product for the producer to the final customer. Evolution of Distribution Functions If intermediaries fail to provide unique value, they are at risk of disintermediation - New technology can render channel members obsolete Online Distribution • The Internet has changed how channel members coordinate supply chains - Knowledge management • Use of Internet as a distribution channel not without challenges - Online distribution piracy Wholesaling Intermediaries Wholesaling Intermediaries are firm that handle the flow of product from the manufacturers to the retailer of business users. Types of Intermediaries: Types of Intermediaries in details: 2 Develop a Channel Strategy Step 1: Develop Distribution Objectives • Objectives must support overall marketing goals - How does distribution work with the other marketing mix elements to increase sales, profits, or market share? - Specific objectives may depend on characteristics of the product and market . e.g., if the product is heavy, a key goal may be to minimize shipping cost. Step 2: Evaluate Internal and External Environmental Influences • What are relevant internal and external environmental influences? Marketers consider both the internal and external environmental influences and how these factors can be used or minimized to develop the best channel structure. • For example, is intensive, selective, or exclusive distribution most appropriate? Step 3: Choose a Distribution Strategy • There are two decision of distribution strategy: - Decision 1: Conventional, Vertical, or Horizontal Marketing System. - Decision 2: Intensive, Exclusive, or Selective. 1. Conventional Marketing System • Multilevel distribution channel in which members work independently of another. -Relationships limited to simply buying and selling from each other. Each firm seeks to benefit, with little concern for other channel members. • Common goals that conventional marketing channel partners work toward are to: build demand (for the product or service) cut costs improve customer satisfaction 2. Vertical Marketing Systems (VMS) • Refers to a channel of distribution in which there is formal cooperation among members at the manufacturing, wholesaling, and retailing levels. • Three types of vertical marketing systems - Administered VMS: One member of the channel is large and powerful enough to coordinate the activities of the other members without an ownership stake. - Corporate VMS: A single firm owns manufacturing, wholesaling, and retailing operations. - Contractual VMS: would include a franchise relationship between a franchise store and the corporate office or producer. The producer likenesses a wholesaler to distribute its products. 3. Horizontal Marketing System • Two or more firms at the same channel level agree to work together to get their product to the customer. - Example: airline code sharing agreements Decision2: Intensive, Selective, and Exclusive Distribution - Intensive distribution: Maximize coverage by selling through as many outlets as possible. - Exclusive distribution: Limit distribution to a single outlet in a particular region - Selective distribution: good market coverage, increased control and reduced costs as compared to intensive distribution. Step 4: Develop Distribution Tactics • Distribution tactics relate to two aspects of strategy implementation of two strategies: 1. Selecting channel partners - Firms consider economic, competitive, relationship, and sustainability factors 2. How to manage the channel Logistic and the Supply Chain Logistic manage the movement of products through a supply chain Order Processing Order Processing includes the series of activities that occurs between the time an order comes into the organization and the time a product goes out the door. Warehousing Warehouse storing goods in anticipation of safe or transfer to another member of the channel distribution Material Handling Is the moving of products into, within, and out of warehouse Transportation The made by which products move among channel member Transportation modes differ along multiple dimensions, including: - Dependability - Cost - Speed of delivery - Accessibility - Capability - Traceability Inventory Control Activities to ensure that goods, are always available to meet customer’s demand. -Just in Time (JIT) delivery systems help ensure deliveries arrive when they are actually needed -New technologies like RFID ( Radio Frequency Identification)also reduce costs Supply Chain Summary Distribution Channel and Wholesale Intermediaries Develop a Channel Strategy Logistic and the Supply Chain Functions of Distribution Channels Develop distribution objectives Wholesaling Intermediaries Evaluate Internal and External Environmental Influences Warehousing Choose a Distribute Strategy Material Handling Order Processing Develop Distribution Tactics Transportation Inventory Control THANKS FOR YOUR PAY ATTENTION
