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Channel of Distribution

Channel of Distribution. Alright kids! I got the orange juice! Let’s go home!. Attention Employees! Juice has arrived…lets carton!. A PATH A PRODUCT TAKES FROM PRODUCER OR MANUFACTURER TO FINAL USER. Let’s plant some seeds . Ok Acme Employees…. Cartoned Orange Juice is being deliviered !.

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Channel of Distribution

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  1. Channel of Distribution Alright kids! I got the orange juice! Let’s go home! Attention Employees! Juice has arrived…lets carton! • A PATH A PRODUCT TAKES FROM PRODUCER OR MANUFACTURER TO FINAL USER Let’s plant some seeds Ok Acme Employees….Cartoned Orange Juice is being deliviered! Ok Gang! Lets change these oranges to juice!

  2. CHANNEL OF DISTRIBUTION • ANSWERS THE “P” = PLACE

  3. DIRECT DISTRIBUTION • PRODUCER TO CONSUMER • NO INTERMEDIARIES • INDIRECT DISTRIBUTION • PRODUCER TO MANUFACTURER TO RETAILER TO CONSUMER • INTERMEDIARIES ARE INVOLVED

  4. CHANNEL MEMBERS • INCLUDES PRODUCERS, MANUFACTURERS AND FINAL USERS • ALWAYS BEGINS WITH THE MANUFACTURER OR PRODUCER • CHANNEL ENDS WHEN THE PRODUCT CHANGES FORM

  5. MEMBERS OF CHANNEL • INTERMEDIARIES • CHANNEL MEMBERS THAT HELP MOVE PRODUCTS FROM PRODUCER /MANUFACURER TO FINAL USER

  6. NON CHANNEL MEMBERS • INCLUDE TRANSPORTATION COMPANIES AND INDEPENDENT STORAGE WAREHOUSES • NEVER TAKE OWNERSHIP

  7. PHYSICAL DISTRIBUTION/TRANSPORT COMPANIES • PROCESS OF TRANSPORTING, STORING, HANDLING GOODS TO MAKE THEM AVAILABLE TO CUSTOMER

  8. DISTRIBUTION INTENSITY • INTENSIVE DISTRIBUTION • Use of all suitable outlets • Objective = complete marketing coverage Example: • Motor Oil

  9. DISTRIBUTION INTENSITY • SELECTIVE DISTRIBUTION • Limited # of outlets in a given geographical area

  10. DISTRIBUTION INTENSITY • EXCLUSIVE DISTRIBUTION • Involves protected territory for distribution of a product in a given geographical area • Example: • Big Mac= only sold at McDonald’s

  11. TYPES OF STORAGE • PRIVATE • PUBLIC • DISTRIBUTION • BONDED

  12. PRIVATE • OWNED BY A BUSINESS • MEETS SPECIFIC NEEDS OF OWNER • COSTLY TO BUILD & MAINTAIN • TOTAL DISTRIBUTION COSTS • STORAGE 51 % • 48% = TRANSPORTATION

  13. PUBLIC • AVAILABLE TO ANY BUSINESS • MUST PAY FOR USE TYPES • COMMODITY – tobacco - agricultural • BULK – oil - chemicals • COLD – fruits - vegies • HOUSEHOLD GOODS - personal • GENERAL MERCHANDISE – no special handling

  14. DISTRIBUTION • VARIATION OF PRIVATE/PUBLIC • SPEEDS DELIVERY OF GOODS & MINIMIZES STORAGE COSTS • MAIN FOCUS = MOVE PRODUCTS!!

  15. BONDED • STORE PRODUCTS THAT REQUIRE THE PAYMENT OF FEDERAL TAX • IMPORTED GOODS • DO NOT HAVE TO PAY TAX UNTIL GOODS ARE TAKEN FROM WAREHOUSE • CAN BE PUBLIC/PRIVATE

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