Module 4 - MKTG 206
Module 4 - MKTG 206
Module - 4
• Three level channel: It can combine the roles of a distributor on top of a dealer and
a retailer. The distributor stocks the most and spreads it to dealers who in turn give
it to retailers. • It as usually observed in both the FMCG and the consumer durables
industry
• Functions of Distribution Channels –
• Information (gathering and distributing information and intelligence) • Promotion
(development and spreading marketing communications) • Contacts (Finding and
communicating with prospective buyers) • Negotiation with customers (reaching an
agreement on price and other terms) • Physical distribution (transporting and
storing goods). Prospecting (finding, communicating, and tracking prospective
buyers) • Financing (acquiring and using funds to cover the costs or carrying out
the channel work) • Risk taking (assuming the risks of carrying out the channel
work) • Break down ‘bulk’ • Provides storage facilities
Distribution channel strategy
• A distribution strategy is a method of disseminating goods or services to end-users.
Implementing the most efficient distribution method for your business is key to
obtaining revenue and retaining customer loyalty. Some companies opt to use
multiple distribution methods to adhere to different consumer bases.
• A company can decide whether it wants to serve the product and service through
their own channels or partner with other companies to use their distribution
channels to do the same.
• Some companies can use their own exclusive stores for their own products or can
use available retail chains to sell their products. It can be combination of both.
Many companies these days also use online exclusive channels to sell their
products or services.
• Importance of Distribution Strategy - Distribution Strategy is precisely the strategy
deployed by a company to make sure the product/service can reach the maximum
potential customers at minimal or optimal distribution costs. A good distribution
strategy can maximize your revenue and profits but a bad and unplanned
distribution strategy can lead not only to losses but also helping the competitors get
the advantage through the opportunity in the market which you created.
• Types of Distribution Strategy
• Overall there are 3 major distribution strategies -
Continued…..