Distribution Strategies
Introduction Decisions regarding distribution in an organization are very important. ... A firm’s distribution system normally takes year’s to build. Distribution in commerce operates by means of channels. A distribution channel can be defined as ‘a set of institutions that perform all the activities necessary to move a product from the point of production to the point of consumption. Channels of distribution decisions involve numerous interrelated variables that must be integrated into the total marketing mix. ... Understanding Distribution A distribution channel is an organized network of agencies, institutions and individuals which together performs all of the activities required to link producers with users and users with producers to accomplish the marketing task. The distribution channel allows the seller to locate and supply the users of his merchandise, and allows the user to find and obtain the products he desires. A channel of distribution may be either direct or indirect. ... The function of a distribution channel is to move goods from producers to consumers; to overcome major time, place and possession gaps that separate goods and services from those who would use them. ... Channels of Distribution As previously noted, a channel of distribution is the combination of institutions through which a seller markets products to the user or ultimate consumer. ... The conventional channel of distribution patterns for consumer goods markets are shown in Figure 1. ... In other cases, one or more intermediaries may be used in the distribution process. ... In contrast to consumer products, the direct channel is often used in the distribution of organizational goods. ... 1 Conventional Channels of Distribution of Consumer Goods Manufacturer Consumers Manufacturer Retailers Consumers Manufacturer Wholesaler Retailers Consumers Manufacturer Agent Retailers Consumers Manufacturer Agent Wholesaler Retailers Consumers Figure: 1.2 Conventional Channels of Distribution for Organizational Goods Manufacturer Organizational Users Manufacturer Organizational Distributors Organizational Users Manufacturer Agents Organizational Users Manufacturer Agents Organizational Distributors Organizational Users Distribution Strategies Because of the characteristics of the product, the environment needed to sell the product, and the needs and expectations of the potential buyer, products will vary in the intensity of the distribution coverage they require.