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WIKIBOOKS
DISPONIBILI
?????????

ART
- Great Painters
BUSINESS&LAW
- Accounting
- Fundamentals of Law
- Marketing
- Shorthand
CARS
- Concept Cars
GAMES&SPORT
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- The World of Sports

COMPUTER TECHNOLOGY
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- Google
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- PHP Language and Applications
- Wikipedia
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EDUCATION
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LITERATURE
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LINGUISTICS
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- English Dictionaries
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MEDICINE
- Medical Emergencies
- The Theory of Memory
MUSIC&DANCE
- The Beatles
- Dances
- Microphones
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SCIENCE
- Batteries
- Nanotechnology
LIFESTYLE
- Cosmetics
- Diets
- Vegetarianism and Veganism
TRADITIONS
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NATURE
- Animals

- Fruits And Vegetables



ARTICLES IN THE BOOK

  1. ACNielsen
  2. Advertising
  3. Affiliate marketing
  4. Ambush marketing
  5. Barriers to entry
  6. Barter
  7. Billboard
  8. Brainstorming
  9. Brand
  10. Brand blunder
  11. Brand equity
  12. Brand management
  13. Break even analysis
  14. Break even point
  15. Business model
  16. Business plan
  17. Business-to-business
  18. Buyer leverage
  19. Buying
  20. Buying center
  21. Buy one, get one free
  22. Call centre
  23. Cannibalization
  24. Capitalism
  25. Case studies
  26. Celebrity branding
  27. Chain letter
  28. Co-marketing
  29. Commodity
  30. Consumer
  31. Convenience store
  32. Co-promotion
  33. Corporate branding
  34. Corporate identity
  35. Corporate image
  36. Corporate Visual Identity Management
  37. Customer
  38. Customer satisfaction
  39. Customer service
  40. Database marketing
  41. Data mining
  42. Data warehouse
  43. Defensive marketing warfare strategies
  44. Demographics
  45. Department store
  46. Design
  47. Designer label
  48. Diffusion of innovations
  49. Direct marketing
  50. Distribution
  51. Diversification
  52. Dominance strategies
  53. Duopoly
  54. Economics
  55. Economies of scale
  56. Efficient markets hypothesis
  57. Entrepreneur
  58. Family branding
  59. Financial market
  60. Five and dime
  61. Focus group
  62. Focus strategy
  63. Free markets
  64. Free price system
  65. Global economy
  66. Good
  67. Haggling
  68. Halo effect
  69. Imperfect competition
  70. Internet marketing
  71. Logo
  72. Mail order
  73. Management
  74. Market
  75. Market economy
  76. Market form
  77. Marketing
  78. Marketing management
  79. Marketing mix
  80. Marketing orientation
  81. Marketing plan
  82. Marketing research
  83. Marketing strategy
  84. Marketplace
  85. Market research
  86. Market segment
  87. Market share
  88. Market system
  89. Market trends
  90. Mass customization
  91. Mass production
  92. Matrix scheme
  93. Media event
  94. Mind share
  95. Monopolistic competition
  96. Monopoly
  97. Monopsony
  98. Multi-level marketing
  99. Natural monopoly
  100. News conference
  101. Nielsen Ratings
  102. Oligopoly
  103. Oligopsony
  104. Online marketing
  105. Opinion poll
  106. Participant observation
  107. Perfect competition
  108. Personalized marketing
  109. Photo opportunity
  110. Planning
  111. Positioning
  112. Press kit
  113. Price points
  114. Pricing
  115. Problem solving
  116. Product
  117. Product differentiation
  118. Product lifecycle
  119. Product Lifecycle Management
  120. Product line
  121. Product management
  122. Product marketing
  123. Product placement
  124. Profit
  125. Promotion
  126. Prototyping
  127. Psychographic
  128. Publicity
  129. Public relations
  130. Pyramid scheme
  131. Qualitative marketing research
  132. Qualitative research
  133. Quantitative marketing research
  134. Questionnaire construction
  135. Real-time pricing
  136. Relationship marketing
  137. Retail
  138. Retail chain
  139. Retail therapy
  140. Risk
  141. Sales
  142. Sales promotion
  143. Service
  144. Services marketing
  145. Slogan
  146. Spam
  147. Strategic management
  148. Street market
  149. Supply and demand
  150. Supply chain
  151. Supply Chain Management
  152. Sustainable competitive advantage
  153. Tagline
  154. Target market
  155. Team building
  156. Telemarketing
  157. Testimonials
  158. Time to market
  159. Trade advertisement
  160. Trademark
  161. Unique selling proposition
  162. Value added


 

 
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MARKETING
This article is from:
http://en.wikipedia.org/wiki/Distribution_%28business%29

All text is available under the terms of the GNU Free Documentation License: http://en.wikipedia.org/wiki/Wikipedia:Text_of_the_GNU_Free_Documentation_License 

Distribution (business)

From Wikipedia, the free encyclopedia

 
Wikibooks
Wikibooks has more about this subject:
Marketing

Distribution is one of the four aspects of marketing. A distributor is the middleman between the manufacturer and retailer. After a product is manufactured it is typically shipped (and typically sold) to a distributor. The distributor then sells the product to retailers or customers.

The other three parts of the marketing mix are product management, pricing, and promotion.

Explanation

Traditionally, distribution has been seen as dealing with logistics: how to get the product or service to the customer. It must answer questions such as:

  • Should the product be sold through a retailer?
  • Should the product be distributed through wholesale?
  • Should multi-level marketing channels be used?
  • How long should the channel be (how many members)?
  • Where should the product or service be available?
  • When should the product or service be available?
  • Should distribution be exclusive, selective or extensive?
  • Who should control the channel (referred to as the channel captain)?
  • Should channel relationships be informal or contractual?
  • Should channel members share advertising (referred to as co-op ads)?
  • Should electronic methods of distribution be used?
  • Are there physical distribution and logistical issues to deal with?
  • What will it cost to keep an inventory of products on store shelves and in channel warehouses (referred to as filling the pipeline)?

The distribution channel

Frequently there may be a chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user.

Channels

A number of alternate 'channels' of distribution may be available:

  • Selling direct, such as via mail order, Internet and telephone sales
  • Agent, who typically sells direct on behalf of the producer
  • Distributor (also called wholesaler), who sells to retailers
  • Retailer (also called dealer), who sells to end customers

Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc.

There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.

Channel members

Distribution channels can thus have a number of levels. Kotler defined the simplest level, that of direct contact with no intermediaries involved, as the 'zero-level' channel.

The next level, the 'one-level' channel, features just one intermediary; in consumer goods a retailer, for industrial goods a distributor, say. In small markets (such as small countries) it is practical to reach the whole market using just one- and zero-level channels.

In large markets (such as larger countries) a second level, a wholesaler for example, is now mainly used to extend distribution to the large number of small, neighbourhood retailers.

In Japan the chain of distribution is often complex and further levels are used, even for the simplest of consumer goods.

Channel structure

To the various `levels' of distribution, which they refer to as the `channel length', Lancaster and Massingham also added another structural element, the relationship between its members:

  • 'Conventional or free-flow - This is the usual, widely recognized, channel with a range of `middle-men' passing the goods on to the end-user.
  • Single transaction - A temporary `channel' may be set up for one transaction; for example, the sale of property or a specific civil engineering project. This does not share many characteristics with other channel transactions, each one being unique.
  • Vertical marketing system (VMS) - In this form, the elements of distribution are integrated.

The internal market

Many of the marketing principles and techniques which are applied to the external customers of an organization can be just as effectively applied to each subsidiary's, or each department's, 'internal' customers.

In some parts of certain organizations this may in fact be formalized, as goods are transferred between separate parts of the organization at a `transfer price'. To all intents and purposes, with the possible exception of the pricing mechanism itself, this process can and should be viewed as a normal buyer-seller relationship. The fact that this is a captive market, resulting in a `monopoly price', should not discourage the participants from employing marketing techniques.

Less obvious, but just as practical, is the use of `marketing' by service and administrative departments; to optimize their contribution to their `customers' (the rest of the organization in general, and those parts of it which deal directly with them in particular). In all of this, the lessons of the non-profit organizations, in dealing with their clients, offer a very useful parallel.

Channel Decisions

  • Overall strategy
  • Channel strategy
  • Product (or service)<>Cost<>Consumer location

Channel management

The channel decision is very important. In theory at least, there is a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. In practice, if the producer is large enough, the use of intermediaries (particularly at the agent and wholesaler level) can sometimes cost more than going direct.

Many of the theoretical arguments about channels therefore revolve around cost. On the other hand, most of the practical decisions are concerned with control of the consumer. The small company has no alternative but to use intermediaries, often several layers of them, but large companies 'do' have the choice.

However, many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and, if he has any aspirations to be market-oriented, his job should really be extended to managing, albeit very indirectly, all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier:

  • Channel membership
  • Channel motivation
  • Monitoring and managing channels

Channel membership

  1. Intensive distribution - Where the majority of resellers stock the `product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident.
  2. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where `suitable' resellers stock the product.
  3. Exclusive distribution - Only specially selected resellers (typically only one per geographical area) are allowed to sell the `product'.

Channel motivation

It is difficult enough to motivate direct employees to provide the necessary sales and service support. Motivating the owners and employees of the independent organizations in a distribution chain requires even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is `bribery': the supplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or a competition is offered to the distributors' sales personnel, so that they are tempted to push the product. At the other end of the spectrum is the almost symbiotic relationship that the all too rare supplier in the computer field develops with its agents; where the agent's personnel, support as well as sales, are trained to almost the same standard as the supplier's own staff.

Monitoring and managing channels

In much the same way that the organization's own sales and distribution activities need to be monitored and managed, so will those of the distribution chain.

In practice, of course, many organizations use a mix of different channels; in particular, they may complement a direct salesforce, calling on the larger accounts, with agents, covering the smaller customers and prospects.

Vertical marketing

This relatively recent development integrates the channel with the original supplier - producer, wholesalers and retailers working in one unified system. This may arise because one member of the chain owns the other elements (often called `corporate systems integration'); a supplier owning its own retail outlets, this being 'forward' integration. It is perhaps more likely that a retailer will own its own suppliers, this being 'backward' integration. (For example, MFI, the furniture retailer, owns Hygena which makes its kitchen and bedroom units.) The integration can also be by franchise (such as that offered by McDonald's hamburgers and Benetton clothes) or simple co-operation (in the way that Marks & Spencer co-operates with its suppliers).

Alternative approaches are `contractual systems', often led by a wholesale or retail co-operative, and `administered marketing systems' where one (dominant) member of the distribution chain uses its position to co-ordinate the other members' activities. This has traditionally been the form led by manufacturers.

The intention of vertical marketing is to give all those involved (and particularly the supplier at one end, and the retailer at the other) 'control' over the distribution chain. This removes one set of variables from the marketing equations.

Other research indicates that vertical integration is a strategy which is best pursued at the mature stage of the market (or product). At earlier stages it can actually reduce profits. It is arguable that it also diverts attention from the real business of the organization. Suppliers rarely excel in retail operations and, in theory, retailers should focus on their sales outlets rather than on manufacturing facilities ( Marks & Spencer, very deliberately provides considerable amounts of technical assistance to its suppliers, but does not own them).

Horizontal marketing

A rather less frequent example of new approaches to channels is where two or more non-competing organizations agree on a joint venture - a joint marketing operation - because it is beyond the capacity of each individual organization alone. In general, this is less likely to revolve around marketing synergy.

References

  • P. Kotler, 'Marketing Management' (Prentice-Hall, 7th ed., 1991)
  • G. Lancaster and L. Massingham, 'Essentials of Marketing' (McGraw-Hill, 1988)

See also

  • Marketing
  • Marketing plan
  • Marketing management
  • Logistics
  • Liquid Logistics
  • Predictive analytics
  • Good Distribution Practice (GDP)

Specific types of distribution

  • Film
  • Records
  • Insurance
  • Electricity
  • Liquids

External links

  • The Logistics Institute
  • LQ Magazine (Logistics Quaterly) Industry and Academic Editorial Content
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