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Chapter

Module 10 Notes

5 Pages
192 Views
Winter 2011

Department
Marketing
Course Code
MKT 100
Professor
Paul Finlayson

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Module 10: Distribution
Section 1: Basic Channel Functions
Distribution: choosing channel partners with positioning and implementation skills
that fit the seller, regardless of its position in the supply chain. Designing a smooth
flow of products , need trust and cooperation between business partners
Channel evolutionary rigidity: thinking this is how we do things here instead of
thats a good idea. The barrier to change
Advances in physical distributions, communications (via internet), and other
information processing technologies reduced the need of some of the customary
activities undertaken by channel distribution intermediates
Relationship must have enough give and take
Evolutionary rigidity can bring down people who want to be innovative, but loyalty
keeps them with each other
Basic channel value activities:
oReaching target customers, where they are and where they shop
Channel segmentation important
oInforming the customer
oServing the customer
oMoving the product
oFinancing the Venture
oTaking risks
oProviding Market Insights
Who should undertake these basic channel functions depends on
oCapability
oCost
oControl
www.notesolution.com
Three fundamental distribution strategies
oFranchising
oMass Distribution
oSelective Distribution
Section 2: Distribution Systems
Franchising
Rapidly reaching out and offering to the entire domestic market a new innovation, a
new product or service
Using an innovators idea, and getting more entrepreneurs to use the innovators
business model and business process
Franchisees eventually start to innovate and make improvements
Franchisee must invest some capital
Mass Distribution
Different products require different distribution systems
Convenience products: shoppers will not go out of their way to buy the preferred
alternative
Mass distribution good for products that are inexpensive, easy to try, frequently
purchased , nondurable, and a low risk purchase for the consumer
Selective Distribution
Customer following is measured in terms of the number and type of existing
customers and their loyalty to the reseller
For mass market products, resellers customer loyalty is determined by convenience
and price image
Specialty market, expertise, service, and image also shape the nature and loyalty of
customers
Specialty distributors usually reserved for expensive, exclusive specialty products
where design, choice of technology, and after sales-service are important
www.notesolution.com

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Description
Module 10: Distribution Section 1: Basic Channel Functions Distribution: choosing channel partners with positioning and implementation skills that fit the seller, regardless of its position in the supply chain. Designing a smooth flow of products , need trust and cooperation between business partners Channel evolutionary rigidity: thinking this is how we do things here instead of thats a good idea. The barrier to change Advances in physical distributions, communications (via internet), and other information processing technologies reduced the need of some of the customary activities undertaken by channel distribution intermediates Relationship must have enough give and take Evolutionary rigidity can bring down people who want to be innovative, but loyalty keeps them with each other Basic channel value activities: o Reaching target customers, where they are and where they shop Channel segmentation important o Informing the customer o Serving the customer o Moving the product o Financing the Venture o Taking risks o Providing Market Insights Who should undertake these basic channel functions depends on o Capability o Cost o Control www.notesolution.com
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