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• Distribution is one of the classic “4 Ps” of marketing (product, promotion, price, placement a.k.a. “distribution”). It’s a key element in your entire marketing strategy — it helps you expand your reach and grow revenue.• B2B and B2C companies can sell through a single channel or through multiple channels that may include:•
The Importance of Marketing Channels• Intermediaries make distribution and selling processes more efficient.• Intermediaries offers supply chain partners more than they could achieve on their own. – Market Exposure – Technical Knowledge/Information Sharing – Operational Specialization – Scale of operation
Channel Efficiency: How Intermediaries Reduce the Number of Channel Transactions
Other Key Channel Functions• Matching Needs with Products• Physical distribution & Logistics• Financing• Risk taking
Distribution Strategy Alternatives• How many intermediaries? – Intensive distribution • Stock product in as many outlets as possible. – Exclusive distribution • Granting a limited number of outlets the exclusive right to sell product. – Selective distribution • Somewhere in between Intensive and Exclusive Distribution. Does the company always get to choose?
FACTORS INFLUENCE• The following factors influence the choice of distribution channels by a business. Market factors An important market factor is "buyer behaviour"; how do buyers want to purchase the product? Do they prefer to buy from retailers, locally, via mail order or perhaps over the Internet?
• Producer factors: A key question is whether the producer have the resources to perform the functions of the channel? For example a producer may not have the resources to recruit, train and equip a sales team. If so, the only option may be to use agents and/or other distributors. Producers may also feel that they do not possess the customer-based skills to distribute their products.
• Product factors: Large complex products are often supplied direct to customers (e.g. complex medical equipment sold to hospitals). By contrast perishable products (such as frozen food, meat, bread) require relatively short distribution channels - ideally suited to using intermediaries such as retailers