Channels of distribution

 All businesses need to distribute their product
to a place where a consumer can find it
 OR
directly to the consumer
 IF the consumer has the product, the
marketer has been SUCCESSFUL
Components of Distribution
 There are two components to distribution
selecting, developing, and managing
distribution channels
physically distributing goods through those
Channels of distribution
 …are the paths of ownership that goods
follow as they pass from the producer to the
 Channel selection
deciding what path a product should take to
reach the target consumer
 Logistics
arranging for the product to move efficiently,
safely, cheaply, and quickly
Possible Channels
Distribution Policies
 Intensive
 Selective
 Exclusive
 Integrated
Intensive Distribution
Used if the product is sold everywhere
Ex: Coca-cola is found in schools, bus
stations, parks, malls, arenas, cafeterias,
grocery stores, drugstores, retail outlets,
planes, trains, movie theatres, restaurants,
Selective Distribution
Try to control the distribution of their
May seek to avoid conflicts in
positioning/brand image
If a retailer orders a manufacturer’s
product, by law the manufacturer cannot
refuse to sell the product to the store
without a valid reason
Exclusive Distribution
The manufacturer has made a deal with one
or two retailers in a particular area to sell the
manufacturer’s product exclusively
This allows the product to have a prestige
image and allows the manufacturer to dictate
some of the retail strategies.
Ex: High fashion clothing, famous-name
watches, luxury giftware
Integrated Distribution
In this case a manufacturer, distributor, or
retailer owns both distribution outlets and
manufacturing facilities for a product
Ex: IKEA, Lee Valley tools – own and
operate their own manufacturing & retail
 Pick an item you have on you right now
What distribution channels do you think it took
to get to you?
 Think of an example for each of the four types
of distribution strategy
 How do you think e-commerce has affected
distribution – especially Exclusive
 Find three examples of products that use
both traditional and e-commerce distributions.
 List as many sources/places from which you
could buy a product (any product).
 Mini case. Working in groups of 3, create a
new product. Tell me about the product and
who it is targeted towards. Finally, choose a
distribution strategy(ies )for your product.
Present your idea to Mr. Brunton.