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DISTRIBUTION POLICY

DISTRIBUTION POLICY. D. Distribution policy. Includes two sets of activities: (1) logistics (2) selection and management of channels of distribution. Policy involves two main decisions:. Those related to design Direct or Indirect Those related to management.

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DISTRIBUTION POLICY

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  1. DISTRIBUTION POLICY D

  2. Distribution policy • Includes two sets of activities: • (1) logistics • (2) selection and management of channels of distribution

  3. Policy involves two main decisions: • Those related to design • Direct or Indirect • Those related to management

  4. Two Types of Middlemenin direct channels • Merchant middlemen take title to products and may or may not take possession • Brokers may or may not take possession, but never take title

  5. decisions related to design--basically related to length (number of different types of middlemen) and breath (number within each type of middleman) • Marketer > wholesaler> retailer> consumer • “ > “ > “ • “ > “ • etc.

  6. Management refers to on-going efforts to develop, manage, and control the designed/selected channel

  7. Distribution Strategy • SHOULD ACCOMPLISH THE FOLLOWING OBJECTIVES:

  8. 1. Provide the best coverage of target market(s)--deliver product at right place, in right quantity, at right price, and at a time when buyers wish to purchase • 2. Satisfy buyer requirements--needs for information, convenience of purchase, services (delivery, credit, repair, etc.)

  9. 3. Maximize potential revenues returned to the organization while minimizing the costs of achieving 1 and 2

  10. DISTRIBUTION POLICY DEVELOPMENT NEED TO CONSIDER FUNCTIONS PERFORMED BY CHANNEL MEMBERS Required Functions are related to push and pull

  11. Channel Functions • What tasks have to be performed • Physical possession Fulfill demand • Ownership After sale service • Information Provide feedback • Orders • Payment • Generate demand

  12. How much does it cost to perform the tasks • What channel structure can most efficiently perform the tasks • YOU CAN DO AWAY WITH THE DISTRIBUTOR BUT NOT ITS FUNCTIONS

  13. CHANNEL SELECTION • What different channels exist/are available • Which can best deliver our products to different segments of our end users • Which channels do our competitors use • How intensive should our distribution be • Exclusive (specialty products) • Selective (shopping products) • Intensive (convenience products)

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