Warm-up

• List all the business that made money from the production and sale of your desk.

Targets

• I can identify the purpose of each channel member.

• I can evaluate different distribution channels.

Place: Getting your product in the hands of your customers.

Distribution

Channel of DistributionThe path a product takes from its producer to the final end user.Intermediaries Business involved in sales transactions that move products from producer to end user.• Reduce the number of contact required to

reach final user

Wholesalers

Business that buy large quantities of goods from manufactures, store the goods, and then resale them to other businesses.

Agents/Brokers

Do not own the goods they sell. They bring buyers and sellers together.

Retailers

Sell goods to the final consumer for personal use.• Brick-and-mortar retailers – physical store• E-tailing – online site• Direct Sales• Telemarketing• Catalogs• Vending Machines

Retail Distribution Strategies

Intensive Distribution:Puts products into as many retail outlets as possible.Selective Distribution:Sells products to only a preferred group of retailers in an areaExclusive Distribution:Sells products to only one outlet in a given area

Direct and Indirect Channels

• Direct distribution occurs when the goods or services are sold from the producer directly to the customer – no intermediaries are involved.–Example: A farmer sells corn at a street

market.• Indirect distribution involves one or more

intermediaries.

Channels in the consumer markets

1. Target market2. Customer Service3. Product image4. Costs5. Transport options6. Payment arrangements

Factors to consider when deciding which Channel of Distribution to use

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Push vs. Pull Marketing

Push Marketing: • The distribution channel promotes and sells

your product to consumers. • Common where brand loyalty is low—the

consumer makes the choice to purchase the product in the store.

Push vs. Pull Marketing

Pull Marketing: • The product is promoted directly to

consumers, who then go to the distribution channel to purchase product.

• Common for products where brand loyalty is high—the consumer chooses to purchase the product before going to the store.