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1. Yo u r C o m p a n y N a m e
Implementing
Distribution Strategy
in your Organization

2. 2
Agenda
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3. Direct Distribution Strategy
Indirect Distribution Strategy
Summary
Three Most Common Distribution Channels
› When to Use Direct
Distribution?
› Direct Channels- Benefits
& Challenges
Direct Channels
› Hybrid Distribution- Advantages
& Challenges
Hybrid DistributionIndirect Channels
› Indirect Distribution-
Advantages & Disadvantages
› When to Consider
Indirect Distribution?
Distribution Strategy Template
Partner Selection Criteria & Assessment
Partner Growth Goals
Trends in Distribution Strategy
0
Table of Contents
33

4. Trends in
Distribution Strategy
4
Hybrid becoming a popular channel
(hotels might sell directly but also via
travel agents)
Internet is changing the distribution
landscape.
Enabling online direct distribution bringing in
higher profit margins and more control over
customer experience
… to reach maximum consumers
Companies using “Big Box” retailers like
Three
Distribution Models
… are governing the way goods & services
are reaching the end consumer
Direct
IndirectHybrid

5. Three Most Common
Distribution Channels
5
Manufacturer supplies
the goods directly to
consumers without
using any intermediaries
› Retail outlets
› Mail order selling
› Internet selling
Direct
Manufacturer sells the
goods to consumers
through one or
more middlemen
› Retailers
› Wholesalers
› Agents/Brokers
› Franchisees
› Resellers
Indirect
Manufacturer sells the
goods through multiple
channels – own as well
as 3rd party channels.
› Own website
› Own retail stores
› Retailers & Wholesalers
› Brokers & Distributors
Hybrid

6. Direct Channels
6
Direct Channel Types-
Distribution from
factory gate
Distribution
by salesmen
Distribution via the
company showroom
and retail outlets
Online
Marketing
No middleman or intermediary;
Supplier owns and manages all the resources in the value chain
Direct selling to consumers
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7. When to Use Direct Distribution?
7
Direct distribution is typically used when:
Examples of
Companies
(Computer
Business)
Southwest Airlines or
easyJet
(low-cost airline business)
(Securities)
(Clothing)
Buyers are easily identifiable
Personal selling is a major component of the
communication mix
Organization has a wide variety of offerings for the
target market
Sufficient resources are available
Intermediaries do not possess the capacity to service
the requirements of target markets
Intermediaries are not available for reaching
target markets
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8. Direct Channels - Benefits & Challenges
With intermediary- Cost at Supplier Level $25 - Cost at Intermediary
Level $50 - Cost for Consumer $100 – Profit Margin $50
Direct Channel- Cost at Supplier Level $25 - Cost for Consumer $100
- Profit margin $75
Increased profit margins
Get your products to consumers faster
Distinguish yourself from the competition
The flexibility to reduce costs, say from $100 to $90, and still earn
higher profit margins
Reduced cost for consumer
Better customer experience through direct
interaction and customer insights
2
3
4
5
1
Challenges-
Company will have to purchase trucks,
hire drivers and rent storage space.
Sizeable Costs
Difficult to reach a very broad base of
customers. The distributors have an
established network.
Limited Reach
Benefits
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8

9. Tier-1
ConsumerManufacturer Retailer
Tier-2
ConsumerWholesaler RetailerManufacturer
Tier-3
ConsumerAgent Wholesaler RetailerManufacturer
Indirect
Channels
9
› Companies often utilize
indirect distribution to
focus on their core
competencies, while
gaining access to
customers by leveraging
channel partners.
› Consumer buys
product from some
intermediary such as
wholesaler, retailer,
dealer, etc.
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10. Indirect Distribution - Advantages & Disadvantages
10
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Pros
› Share shipping and storage
costs
› Make it easier for customers to
find your products
› Benefit from your third-party’s
experience, infrastructure and
salesforce
› Avoid the complexity of
managing distribution logistics
› Puts distance between you
and your customers.
› By adding an intermediary, you
are also increasing the amount
of time it takes for your product
to reach the buyer.
› It’s also harder to establish
brand loyalty when you are not
interacting directly with
your customer.
Cons

11. PepsiCoca-cola
Examples of
Companies
When to Consider Indirect Distribution?
11
Intermediaries can perform distribution functions more
efficiently and less expensively
Customers are hard to reach directly
Organization does not have resources to perform
distribution function
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12. Hybrid Distribution
12
Examples of
Companies following
this model:
When companies add new channels to existing
ones, they follow the hybrid model.
Companies earlier selling via a dealer are now
also selling via their own website or retail stores
i.e. added direct to indirect. Example - Apple
Companies earlier selling via direct are now
adding indirect channels such as dealers, value-
added resellers, catalog operations, direct mail,
and telemarketing i.e. added indirect to direct.
Example – IBM.
Such companies sell via direct channels as well
as retailers. This gives advantages of both the
models as you get the increased market coverage
of indirect channels as well as the improved
customer experience via direct channels.
Hybrid
Distribution
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13. Conflict as more marketing channels
compete for revenue
Difficult to control multiple
channels
Channel conflict raises issue of lowering
prices as direct channels conflict with indirect.
Pricing has to be kept common for both.
Better customer
experience via direct
Higher profit margin
in direct selling
Lower distribution costs
via indirect
Increased coverage by
combining direct & indirect
Customized
approaches
Hybrid Distribution - Advantages & Challenges
13
› The need to increase market coverage. Indirect channels help you reach new customers and segments.
› The need to contain costs is another factor. Direct selling can become costly. Distribution via intermediaries is cheaper.
› Add text here
› Add text here
When to Use
Hybrid
Distribution
ChallengesAdvantages
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14. Summary
14
› Retail outlets
› Mail order selling
› Internet selling
› Higher profit margins
› Lower product pricing
insights
› Better CX
› Best value proposition
› Sizeable costs
› Limited reach
› Non-availability of
intermediaries
› Direct customer contact
› Pricing economics
› Retailers
› Wholesalers
› Agents/Brokers
› Franchisees
› Resellers
› Share costs
› Broader distribution
› Benefit from your third-
party’s experience,
infrastructure
› Easier distribution logistics
› Lesser margins
› No brand loyalty
› Difficulty in accessing
customers
› Need to increase market
share
› Limited capital for
distribution
› Own website
› Own retail stores
› Retailers & Wholesalers
› Brokers & Distributors
› Best of both › Conflict
› Lack of control
› More reach, more profits,
more distribution points
Type
Direct
Indirect
Hybrid
Benefits ChallengesDistribution Options When to Use
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15. Direct Distribution Strategy
15
Improve operations & services at existing locations
Open more retail stores in new locations
Close stores in unprofitable locations

16. Indirect Distribution Strategy
16
More locations within current channel partners or signing up new channel partners
Strengthen existing channel partners
1
Improved
value proposition
Improved
processes
New marketing
campaigns
More effective
sales support
strategies
Add more channel partners & stores
2
Remove Unproductive Channel Partners
3
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17. Partner Growth Goals (Option 1 of 2)
17
$11.2
$13.6
$15
$0
$10
$20
2018 2019 2020
InMillions
Target
› Pricing/Discounts
› Partner Payment Plans
› Text here
› Text here
35% 37% 40%
42% 44% 50%
91% 93% 100%
41% 51% 55%
2018 2019 Target 2020Revenue
Performance Metric
Initiatives for
Channel Growth:
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Customer
Satisfaction
Profit
Margin
Net New
Customers
Net
Promoter

18. Partner Growth Goals (Option 2 of 2)
18
› Pricing/Discounts
› Partner Payment Plans
› Text here
› Text here
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Initiatives for
Channel Growth:
$ 11.2 M $ 13.6 M $ 15 M
35% 37% 40%
42% 44% 50%
91% 93% 100%
41% 51% 55%
Customer Satisfaction
Profit Margin
Net New Customers
Net Promoter
Revenue
2018 2019 Target 2020

19. Partner Selection Criteria & Assessment
19
Partner A Partner B Partner C Partner D
9 8 7 7
8 7 7 6
9 7 5 5
8 8 8 6
9 6 7 5
43 36 34 29
SelectionCriteria&Assessment
Value Added to Our
Value Proposition
Total Score
Best coverage of the
target market
Most profitable
Geographic
Alignment
Best satisfy the buying
requirements of the
target market
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Criteria

20. Distribution Strategy Template
20
Strategies for
Future-
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Revenue per
Location
Revenue per
Partner
Number of our
Retail Stores
Number of Partner
Retail Stores
Online Sales
Gross Margin
Number of Channel
Partners
Target 2020
$ 15 M
$ 12 M
8 K
45
$ 5 M
38%
15 K
2019
$ 12.1 M
$ 9 M
6 K
35
$ 3.6 M
36%
13 K
2018
$ 10.5 M
$ 7 M
5 K
30
$ 3 M
35%
12 K
Metrics

21. Implementing Distribution Strategy in your Organization for Icons Slide
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22. 22
Additional Slides

23. Company Introduction
23
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Target Audience
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Creative
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Values Client

24. 24
Our Vision Mission Values
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25. Our Goal
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Goal 02
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Goal 01
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26. Organization Chart
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27. Comparison
$75 Billion
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Google
$57 Billion
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Microsoft
$58 Billion
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Facebook
$40 Billion
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Apple
27

28. Bar Chart
28
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Product 01
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automatically based on data. Just left click on it
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Product 02
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2018
2019
2020
Product 01
Product 02

29. Pie Chart
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Add Text Here
Add Text Here
Add Text Here
Add Text Here
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15%
17%
14%
13%
12%
4%
7%
18%

30. Dashboard
30
20%
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80
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31. Linear Diagram
31
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33. Roadmap
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Start
End2016
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2018
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2020
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34. Timeline
34
2016
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35. 35
Thank You
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