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Intro to Business

Intro to Business. Chapter 10, Section 3 (Part II) – Placement. How Did I Get Here?. Distribution (Placement). Determining the best methods and procedures to use to allow customers to find, obtain and use a product/service. Channel of Distribution.

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Intro to Business

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  1. Intro to Business Chapter 10, Section 3 (Part II) – Placement

  2. How Did I Get Here?

  3. Distribution (Placement) • Determining the best methods and procedures to use to allow customers to find, obtain and use a product/service

  4. Channel of Distribution • Route a product follows and the businesses involved in moving a product from producer to final consumer

  5. Conventional Channels

  6. Need for Channels • Differences in Quantity • Example: P&G Pantene Shampoo • Differences in Assortment • Consumers want variety of products • Example: Dell Computers

  7. Need for Channels • Differences in Location • Reaching customers in different places • Example: Wal-Mart Hub & Spoke Network

  8. Distribution Channels… • Take the large quantities produced and breaks them into quantities people want • Gather products from many producers to give customers variety they want in convenient locations • Move products efficiently from where they are made to where they are sold

  9. Channels and Channel Members • Channel Members – Businesses that take part in a channel of distribution • Channels • Direct: products move from producer straight to consumer with no other “help.” • Indirect: includes one or more other businesses between producer and consumer.

  10. Indirect Channels • Other businesses, aside from producer, perform one or more marketing functions • Transportation • Sales • Financing Retailers are the FINAL organization in an indirect channel for consumer products

  11. Channel Considerations • Coverage Required • Intensive Distribution vs. Selective Distribution • Degree of Control Required • Indirect – we are giving up control of marketing to some degree • Cost • Transportation, Processing, Carrying Costs, Packaging, Handling

  12. Activity – Distribution Channels • 1). Identify a producer and product that uses a Direct Distribution Channel • 2). Identify a producer and product that follows an Indirect Distribution Channel (include the various channel members)

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