Distribution: Customer ServiceMARKETING

REVIEW Channel Structure/Design

1. Setting distribution objectives Meeting customer needs is the ultimate goal

2. Specifying distribution tasks who does what along the supply chain (channel of distribution)

3. Considering alternative channel structures Three dimensions:

Length/Intensity/Types of intermediaries

4. Choosing optimal channel structures Each participant in the marketing channel focuses on performing those activities at

which it is most efficient. This results in much greater efficiency and higher output.

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Intensity of Channel Structure

Channel intensity: the number of intermediaries at each level of the marketing channel.

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All PossibleIntermediaries

Relatively FewIntermediaries

Just OneIntermediary

Intensive ExclusiveSelective

Intensive Distribution

= the use of all suitable outlets to sell a product.

The objective is complete market coverage and the ultimate goal is to sell to as many customers as possible, wherever they choose to shop.

Ex. Motor oil is sold in quick-lube shops, farm stores, auto parts retailers, supermarkets, drugstores, hardware stores, warehouse clubs, and other mass merchandisers.

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Selective Distribution

= a limited number of outlets in a given geographical area are used to sell the product.

Very important to select channel members that maintain the image of the product & are good credit risks, aggressive marketers & good inventory planners.

Ex. Armani & Lucky Brand sell their clothing only through top department stores that appeal to the affluent customers who buy its merchandise. It does not sell in a chain megastore or a variety store.

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Exclusive Distribution

• = protected territories for distribution of a product in a given geographic area; business maintains tight control over a product

• Ex. Franchisor legally requires a franchisee to sell only the franchisor’s products

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Integrated Distribution

Manufacturer acts as wholesaler and retailer for its own products.

EX. Sherwin-Williams Paint, Merle Norman

Ex. The Gap or Ann Taylor sells its clothing in company-owned retail stores.

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OBJECTIVE TWO:

Explain the relationship between customer service and channel management

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Explain how customer service facilitates order processing

Ensures timely delivery of products Effective communication is important

Order processing Correct shipping information

Correct products

Handling complaints

Reducing the probability of complaints

Nice and friendly people

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Identify actions that customer service can take to facilitate order processing

EX. In retail selling Bag the merchandise with care.

Products such as glassware may require individual wrapping before bagging.

Work quickly to bag your customer’s merchandise and complete the payment process.

EX. In business-to-business sales Complete the paperwork quickly and leave a business card.

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11Customer

Warehouse

Call Center

Online Order

Inventory Check

Items

in Stock?

No, Customer Notified of Backorder

Yes, Item Packed for Shipment

Accounts Receivable Processes Payment

Item Shipped

Actions to Facilitate

Order Processing

Describe the role of customer service in following up on orders

Following up with your customers after the sale is an important part of providing good customer service.

Should customer have questions or problems it is your duty to make sure they have a positive experience with your company.

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13Use of Technology in Distribution

Some businesses have the capacity to distribute most or all of their products through the internet e-commerce: Products are sold to customers and industrial

buyers through the Internet.

Satellite tracking = a dispatcher has current knowledge of a delivery truck’s location and destination

14Use of Technology in Distribution (cont.)

Tracking of package Bar coding on package

Package scanned at transition points in distribution chain

Customer uses internet to follow package along distribution chain; e-mail may be used

Global distribution: in some countries the postal service is not reliable; package tracking facilitates global trade

15Use of Technology in Distribution (cont.)

Problems

Cost of technology

Changing technology = updating equipment

Need for compatible systems within and between businesses & countries

Video

http://channel.nationalgeographic.com/channel/ultimate-factories/videos/ups/

Unit 3 Test

3.1: Product Packaging & Life Cycle

3.3: Product Mix

3.4: Branding

3.6: Pricing

3.7: Distribution

http://quizlet.com/31499624/flashcards