 Both
firms aim to make their products readily
available consistent with their target customer’s
purchasing pattern.
 Making
products available needs a coherent
distribution plan composed of the following 6
mix elements ;
Having the proper
types of outlet in a
geographical area is
important.
 Ex: Muslim do not eat
pork so there is no need
to prioritize coverage of
pork luncheon meat in
areas strongly
dominated by Muslims.

A
product has
placement when it is
carried in a store.
Placement objectives
or having a right
target number of
outlets ensure
customer’s utmost
convenience.
 The
right inventory
level at the stores is
critical . A firm may
launch a new brand
of shampoo or
advertise a
promotional
campaign, which may
result out-of-stock
situations.
The right shelf and offshelf locations plus
adequate display
space assure
marketers a higher
probability that
consumers will choose
their brand.
 The good spaces in the
stores such as those at
eye level are usually
given to the leading
brands,

 Having
the right
resale prices
promotes healthy
competition among
dealers.
 Goodwill
refers to the
best relationship
between a supplier
and his channel
members.
Shows a comparative
selling process of a firm
targeting end users versus

distribution channels.
A.
Selling to End Users
B. Selling to Distrubution Channels
Prospecting
Routine Observation
Pre-Approach
Display Check
Approach
Warehouse Check
Sales Probing
Collection
Presentation
Presentation
Handling Objections
Handling Objections
Demonstration
Sell-Out Plan
Closing
Closing
Distribution channels
Marketing intermediaries make up a
marketing or distribution channel. A
distribution channel performs the work of
moving products from manufacturers to
final consumer or business users. A good
distribution channel shortens the time,
place, and possession gaps between the
manufacturers and consumers.
Distribution Channels :
Manufacturer
Distributors
Jobbers
Retailers
End Users
Distributors:
Distributors are appointed to perform
the distribution function for manufacturers
in making their products available. They
may sell to wholesalers or retailers or may
even go directly to consumers.
Wholesaling:
Wholesaling are activities of persons
or organizations that sell to those who buy
for resale (like retailers) or business use
(like industrial, institutional, and
commercial users).
Divisoria:
There are several wholesalers located
in divisoria and some retailers prefer to
buy from them instead of directly from
manufacturers because of their lenient
credit policy.
Jobbers:
Jobbers are wholesalers who also
provide warehousing space for
manufacturers and distributors, thus
enabling the latter to avoid a fixed cost.

Is a sales operation
where the ex-truck
salesman carries
stocks in his van or
small truck, saturates a
given territory
regularly by selling his
stocks on “cash” basis,
and delivers the stocks
immediately upon
order.
 Some
manufacturers or
wholesalers/distributors are using the
feeder model. Here instead of two-man
team of the ex-truck sales-man and
delivery helper saturating a territory with
stocks in their van, a distributor salesman
goes around by himself to take orders
and relays these to a delivery team who
will bring the orders to the retailers.
 Is
an activity
involving the sale of
products or services
directly to final
consumers.

An accelerated method
to expand distribution is
thru franchising.
Franchising is a business
relationship in which the
franchisor (the owner of
the business providing
the product or service)
assigns to independent
people the right to
market and distribute the
franchisors goods or
service, and to use the
business name for the
fixed period of time.
Direct Selling:
There are over two-dozen members of
Direct Selling Association Of The Philippines
(DSAP). Some members are:
 Amway
(personal and home care)
 Avon (cosmetics and related products)
 Nu Skin (beauty and health care)
 Sunrider (food supplements)
 Tupperware (plastic wares)
 Waters (water purifiers and foot detox)
Internet:
E-business has been buzzword since
the 1990's. No longer are companies
limited to sell products through stores or
through direct sales.
Home Delivery:
Home delivery offers a huge potential
influenced by more women working, lack
of household maids, traffic and parking
problems, as well as the consumer psyche
of rewarding themselves after a hard day's
work.
Diagnostic Distribution:
We use the term diagnostic
distribution to mean the proper matching
of distribution channels to the selling
process as in exhibit 7-3. Marketers, for
instance, may combine different
distribution channels to achieve desired
sales, profit, market penetration and
market shares objectives.
Exhibit 7-3: Diagnostic Distribution
Direct mail
Prospecting (sales leads generation)
Telemarketing
Qualifying Sales
Direct Selling
Sales Probing
Sales Presentation
Handling Objectives
Approach
Retailing
Closing
Demonstration
Dealers
After Sales Service

Firms may adapt or change their distribution methods depending
on their needs during different scenarios.
STRATEGIC ALLIANCES:
Trade costumers and suppliers enter
into a strategic alliance to attain some
long-term objectives and mutually improve
their position in the industry.
Exhibit 7-4: Strategic alliance
framework
To
Salesman as only link
Team selling as an initial step
to strategic alliance
- Why compete? When you can collaborate?
Competition can sometimes collaborate if the
collaboration will result in the overall increase
of satisfaction of each competitor’s customers
as well as for cost-efficiency.
-
Marketers must be careful in choosing their
distribution system, as each channel will produce
different levels of costs and sales volume. In evaluating
alternative distribution channels, the 3Cs of
distribution must be considered: Cost- efficiency,
Control, and Channel Modification.
- It is important to estimate the long term impact of
having one’s own sales force versus appointing a
distributor. Once sales volume increases to an
economic level, having one’s own sales force may be
more cost-efficient assuming they can maintain at least
the same volume and expense ratio.
- As distributors are not the company’s employees, they may
have different priorities. Profit may be their main objective
while the firm’s objective may be market penetration and
market shares. It is important that the objectives, priorities
and expectations of the firm be communicated and agreed
upon before principals are chosen and distributors are
appointed.
- The marketplace is ever changing. The flexibility to
modify distribution may be needed. Other changes in
the consumer purchasing pattern such as when the
product matures, when new competition arises, and
when innovative distribution emerges, must also
considered.
Product Type
After Sales Service
Company Resources
Distribution
Price
USE MIDDLEMEN
SELL DIRECT
Simple
Sophisticated
Few
Critical
Weak
Strong
Low Control
High Control
Low
High

Marketing Channels
usually describe forward
movements of products
from manufacturers to
the ultimate consumers.
However, it is possible
that backward
distribution will become
trend as well as
challenge with the
increase popularity of
green marketing as
described in chapter 4E.
 Or
A parallel
distribution is a term
used to describe
UNATHORIZED
importation and
distribution of
products bearing
genuine brands
across markets.
 The
paraller distributor may or may not
be an importer himself. If he is an
importer, he is likely an importer
resorting to smuggling products into
Phillipines to avoid paying taxes .
 Smuggling comes in many form.
-Outright smuggling
-Technical smuggling
 Parallel
distribution is destructive. This
often result in price wars between the
legitimate and the parallel distributor.
 Another problem posed by gray
marketing is that goodwill established by
the trademark owner is jeopardized
because customers who purchase the
goods in gray market do not get the same
extended product.
 To
stop PARALLEL DISTRIBUTION
-always price the product reasonably or to
have a goodtrade discount structure.
-warn the customers about the
unauthorized distribution where warranty
may not be honored.
-stop the supplying source of the parallel
distibution.





The european Community or EC
became a single market in 1992.
Its formation leaded to the
expantion of the European Market
base into US$15 trillion with 501
million consumer on 2008.
US and canada had the similar
free trade agreement in 1989.
Mexico join US and Canada to
form the NAFTA which officially
start on jan 1, 1994.
The ASEAN countries originay
composed of Phillipines ,
Malasysia, Singapore, Thailand,
Indonesia, and Brunei. Also have
their similar version called
ASEAN Free trade O AFTA
(jan1992).



AFTA is a single unified market
ofover 592 million people worth
US $ 1.49 trillion as of 2009.
Under the original (CEPT)
Common Effective Preferential
Tariff agreement , tariffs for all
manufactured products with at
least 4o% ASEA component cont
level, have progressively
beenreduced to a maximum of
20% within five to eight years,
and zero to five percent in
subsequent seven year period.
From production point of view,
AFTA resulted to more and
cheaper sources of raw materials
as well as economies of scale.
In the phillipines , tariff reduction was
implementes gradually under EO470 and it
started 1996.
 The Phillipine Government must FIRST and
FOREMOST ensure political stability.The
government must continuosly and consistently
encourage local industries to upgrade
production and research technologies to improve
productivity and competitiveness.


The Board of Investment or BOI must cut red tape
and shorten the bureauracy to attract more
foreign investment.
Thank
you for listening 