Distribution system

3.02 -
Marketing Channels and Distribution
Decisions In the Sport Industry
Distribution Defined
Distribution is the process of getting the
product to the consumer.
 A Distribution system is the methods
and channels used in delivering products
from producer to consumer.
 An Intermediary is an individual or
organization through which products move
from producer to consumer.
Product Types
Sports activities are participation products such
as participation in basketball, bowling, scuba,
hiking, sky diving, running, weight training,
sailing, water skiing, golf, and snow-boarding.
 The activities are offered—packaged—to the
consumer in a number of ways such as leagues,
tournaments, championships, races, meets,
regattas, outings, and adventure travel
Sport Business Goods
• Sport Business Services: The cleaning, repair,
and maintenance of sports equipment alone makes
up an important part of the sport service industry.
• Sports Entertainment: The development of
sports as an entertainment product is a fastgrowing segment of the sport business industry.
• Sport Media: Some examples of sport media are
sports magazines (print), electronic sports
businesses (Web-based businesses), and industry
trade magazines. The consumers of these can be
either end or business consumers.
Distribution of Products
Tangible products are physical objects. Most are
manufactured in mass quantities at a factory and
must be moved—distributed—to a place of
purchase—retailer or wholesaler. For example,
running shoes are manufactured in a factory and
must be moved to a retailer to be sold.
Intangible products are not physical objects and
include products such as services, places, and ideas.
Shelf Life: amount of time that a product can
remain in a good and consumable condition after
being manufactured.
Time, Place, and Possession Utility
Through Distribution
Time utility is getting the product to the
consumer when the consumer wants it.
Place utility is getting the product to the
consumer where the consumer wants it.
Possession utility is creating possession of
the product for the consumer.
The Distribution System
Types of Distribution Intermediaries
• Wholesaler—a company that buys goods in
large quantities specifically to resell to retailers
or final consumers (Peter and Donnelly, 1993).
• Retailer—a company that buys goods to resell
to consumers (Peter and Donnelly, 1993).
• E-tailer—an electronic retail store.
The Distribution System (cont’d)
Types of Distribution Intermediaries
• Agent—a person or a company who “moves”
products (facilitates the sale) by taking orders
for a buyer and placing the order with the
producer (Boone and Kurtz, 1992).
• Mail order—a company that buys direct from
a manufacturer or producer and offersthe
products through a catalog or electronic system
(Cravens and Woodruff, 1986).
• Distributor—a wholesale intermediary (Peter
and Donnelly, 1993).
Complex Distribution System in the
Sport Industry
The Distribution System (cont’d)
• Selection of a Distribution System: The
considerations of the consumer should be the
deciding factor in the selection of a distribution
• A company should study what the competitors
are doing before making any sort of business
• Exclusivity drives up demand, which in turn
drives up prices.
3.02 Questions
1. What is distribution?
2. Describe the different kinds of distribution
in the sport industry.
3. What are distribution intermediaries? Give
some examples.
4. What is a distribution system? Give some
examples of systems in the sport industry.
Questions (cont’d)
5. What are the factors that affect the
selection of a distribution system?
6. What is distribution intensity? Why is it
linked to promotion and positioning the
product? Give some examples of each
7. What are some examples of different
types of products found in the sport
business industry? Develop what you think
would be some appropriate distribution
channels for these products.
Learning Activities
1. List some sport products offered in your
city or community. Create a distribution
system for each. Research the real costs
of your systems. Give a presentation in
The cable network that televises
college basketball games throughout
the country is __________ the sports
A. distributing
B. franchising
C. publicizing
D. sponsoring
Rhonda is making a presentation to the
chamber of commerce of a large city in
anticipation of building a sports
complex. What is the primary element of
distribution that she should discuss with
A. Amenities
B. Revenues
C. Parking
D. Facility
Expanded bandwidth is changing the face of
in-home entertainment by
A. eliminating the need for cable hookups.
B. allowing for delivery of the Internet
through television sets.
C. improving fiber optics cable and electrical
D. creating high-definition television.
Which of the following is a place decision
that must be made in sports and
entertainment marketing:
A. Should direct mail be sent to last season's
ticket holders?
B. Will local or national media be used?
C. How will fans obtain the schedule of
D. Where will ticket outlets be found?