DISTRIBUTION

A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

The route taken by the title to the product as it moves from the producers to the ultimate consumer or industrial user.

Marketing or Distribution Channel

MIDDLEMEN A middlemen is an independent concern that operates as a link between producers and ultimate consumers or industrial user

You can eliminate the middlemen, but you cannot eliminate their functions (activities)

THE GENERAL TASKS IN THE CHANNEL ARE :

Ordering Handling and shipping Storage Display Promotion Selling Information feedback

How an intermediary increases distribution efficiency

Value added by intermediary through performance of marketing functions for manufacturer and customers

Consumer and Business Channels

Distribution Decisions; Channel alternatives; Choice of Channel; Channel Management, Channel Dynamics

CHANNEL-DESIGN DECISIONSChannel Alternative Evaluation Criteria:Economic criteria Sales and costs vs. added valueControl criteriaAdaptive criteriaAfter choosing a particular channel alternative, firms take several actions

CHANNEL-MANAGEMENT DECISIONSMotivate channel membersEvaluate channel membersModify channel arrangements

Channel Development Process Select channel membersTrain channel members

CHANNEL DYNAMICSChannel systems are constantly evolving and developingVertical Marketing SystemsCorporate VMSAdministered VMSContractual VMSHorizontal Marketing SystemsMultichannel Marketing Systems

CHANNEL DYNAMICSConflict, Cooperation, & CompetitionTypes of conflictVertical, horizontal, and multichannelCauses of conflictMajor causes: Goal incompatibility; unclear roles and rightsOther potential causes existManaging channel conflict

CHANNEL-MANAGEMENT DECISIONSCooptationDiplomacyMediationArbitrationManaging Channel ConflictSubordinate goal adoptionExchange people between channel levels

CHANNEL DYNAMICSLegal and Ethical Issues in Channel RelationsTwo common distribution practices are legal as long as they dont substantially lessen competition:Exclusive dealingTying agreements