2. Distribution’s Function
• The major purpose of marketing is to satisfy
human needs by delivering products of various
types to buyers when and where they want them
and at a reasonable cost.
• The “when and where” is the function of
3. What is a Distribution Channel?
• A set of interdependent organizations
(intermediaries) involved in the process
of making a product or service available
for use or consumption by the consumer
or business user.
• Marketing Channel decisions are among
the most important decisions that
management faces and will directly
affect every other marketing decision.
4. Why are Marketing Intermediaries
• The use of intermediaries results from their
greater efficiency in making goods available to
• Offer the firm more than it can achieve on it’s
own through the intermediaries:
– Scale of operation.
• Purpose: match supply from producers to
demand from consumers.
21. Conventional Distribution Channel vs.
Vertical Marketing Systems
22. Types of Vertical Marketing Systems
Common Ownership at Different
Levels of the Channel
Contractual Agreement Among
Leadership is Assumed by One or
a Few Dominant Members
24. Planning the Channel of
• Determining the structure
– Marketing mix strategy
– Organizational resources
– External environmental factors
– Market characteristics
– Consumer preferences and behavior
– The nature and availability of Intermediaries
– Other environmental factors
30. Product is sold in
only one outlet in
a given area
31. Developing Distribution Tactics
Selecting Channel Partners
Managing the Channel of Distribution
Channel Leader Power
Distribution Channels & the Marketing Mix
34. Channel Conflict: Identifying
• First, are the channels really attempting to
serve the same end users?
• Second, do channels mistakenly believe
they are competing when in fact they are
benefiting from each other's actions?
• Third, is the deteriorating profitability of a
griping player genuinely the result of
another channel's encroachment?
• Fourth, will a channel's decline
necessarily harm a manufacturer's
35. Managing Channel Conflict
WHEN TWO OR MORE CHANNELS
TARGET THE SAME CUSTOMER
• Differentiate the Channel offer
• Define Exclusive Territories
• Enhance or Change the Channels
36. Managing Channel Conflict
CHANNEL ECONOMICS DETERIORATE
• Change the channels economic formula:
(Grant rebates if an intermediary fulfill certain
requirements; Adjust margins between products
to support different channel economics; and
Treat channels fairly to create level playing field)
• Create Segment Specific Programs (certain
services not available via direct channels)
• Complement value proposition of the existing
channel by introducing a new channel
• Foster consolidation among intermediaries in a
37. Managing Channel Conflict
THREATENED CHANNEL STOP
PERFORMING OR RETALIATE AGAINST
• Leverage Power (eg. Strong Brand) against
the channel to prevent retaliation
• Migrate volume to winning channel
• Back off
40. Nature of Personal Selling
• Most salespeople are well-educated, well-
trained professionals who work to build and
maintain long-term relationships with customers.
• The term salesperson covers a wide spectrum
of positions from:
– Order taker (department store salesperson)
– Order getter (someone engaged in creative selling)
– Missionary salesperson (building goodwill or
41. What is Personal Selling?
Involves Two-Way, Personal
Communication Between Salespeople
and Individual Customers Whether:
face to face,
through video conferencing,
or by other means.
42. The Role of the Sales Force
• Personal selling is effective because
– probe customers to learn more about their
– adjust the marketing offer to fit the special
needs of each customer,
– negotiate terms of sale, and
– build long-term personal relationships with key
43. The Role of the Sales Force
Serves as a Critical Link
Between a Company and its Customers Since They:
Represent Customers to
the Company to Produce
Represent the Company
to Customers to Produce
44. Characteristics of Personal Selling
• Identify best
• Adapt to situations
• Engage in dialogue
• Long term
• Assure buyers
• Solves customer’s
55. Step 1. Prospecting and
Identifying and Screening For
Qualified Potential Customers.
Steps in the Selling Process
Learning As Much As Possible
About a Prospective Customer
Before Making a Sales Call.
Step 2. Pre-approach
Step 3. Approach
Knowing How to Meet the Buyer
to Get the Relationship Off
to a Good Start.
Step 4. Presentation/
Telling the Product “Story”
to the Buyer, and Showing the
56. Steps in the Selling Process
Step 5. Handling Objections
Step 6. Closing
Step 7. Follow-Up
Seeking Out, Clarifying,
Customer Objections to
Asking the Customer
for the Order.
Following Up After the Sale to
Ensure Customer Satisfaction
and Repeat Business.