Distribution

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Distribution

• BMI3C

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CHANNELS OF DISTRIBUTION

• All businesses need to distribute their product
  either
• to a place where a consumer can find it
• OR
• directly to the consumer
• IF the consumer has the product, the marketer has
  been SUCCESSFUL

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Components of Distribution

• There are two components to distribution
• selecting, developing, and managing distribution
  channels
• physically distributing goods through those
  channels

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Channels of distribution

• are the paths of ownership that goods follow as
  they pass from the producer to the consumer
• Channel selection
• deciding what path a product should take to reach
  the target consumer
• Logistics
• arranging for the product to move efficiently,
  safely, cheaply, and quickly

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Possible Channels
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Distribution Policies

• Intensive
• Selective
• Exclusive
• Integrated

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Intensive Distribution

• Used if the product is sold everywhere
• Ex Coca-cola is found in schools, bus stations,
  parks, malls, arenas, cafeterias, grocery stores,
  drugstores, retail outlets, planes, trains, movie
  theatres, restaurants, etc.

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Selective Distribution

• Try to control the distribution of their product
• May seek to avoid conflicts in positioning/brand
  image
• If a retailer orders a manufacturers product, by
  law the manufacturer cannot refuse to sell the
  product to the store without a valid reason

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Exclusive Distribution

• The manufacturer has made a deal with one or two
  retailers in a particular area to sell the
  manufacturers product exclusively
• This allows the product to have a prestige image
  and allows the manufacturer to dictate some of
  the retail strategies.
• Ex High fashion clothing, famous-name watches,
  luxury giftware

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Integrated Distribution

• In this case a manufacturer, distributor, or
  retailer owns both distribution outlets and
  manufacturing facilities for a product
• Ex IKEA, Lee Valley tools own and operate
  their own manufacturing retail stores

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Questions

• Pick an item you have on you right now
• What distribution channels do you think it took
  to get to you?
• Think of an example for each of the four types of
  distribution strategy
• How do you think e-commerce has affected
  distribution especially Exclusive distribution?

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Looking ahead

• List as many sources/places you can from which
  you could buy a product (any product)