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REVIEW OF DISTRIBUTION

REVIEW OF DISTRIBUTION. Professor Edward Fox Cox School of Business Southern Methodist University. What is a Distribution Channel?.

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REVIEW OF DISTRIBUTION

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  1. REVIEW OF DISTRIBUTION Professor Edward Fox Cox School of Business Southern Methodist University

  2. What is a Distribution Channel? • A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user

  3. What is a Distribution Channel?CONSUMER GOODS Mfgr Consumer Direct Channel Mfgr Retailer Consumer Indirect Channels Mfgr Wholesaler Retailer Consumer Mfgr Wholesaler Jobber Retailer Consumer Most consumer goods channels include a retailer Adapted from Prentice Hall

  4. Why Do Manufacturers Distribute Through Retailers? • Greater efficiency in making goods available to target markets • Enable manufacturers to distribute products more effectively than they can alone because of retailers’: • Customer relationships • Experience and expertise • Specialization • Provides consumers with variety • One-stop-shopping • Offers a choice

  5. Why Do Retailers Exist? Make distribution more efficient! Adapted from Prentice Hall

  6. What Value Do Retailers Add for Consumers?SERVICE OUTPUTS Lot Size Convenience (Location) Waiting Time Variety Source: Pete Bucklin

  7. Service OutputsWHAT DO THEY INVOLVE? • Inventory management • Breaking bulk • Sorting • Stockpiling • Variety management • Geographic distribution • Transportation • Convenient, timely access for the end user

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