1. Distribution March 03, 2010

2. Channels of Distribution McGraw-Hill/Irwin ©2007 by the McGraw-Hill Companies, Inc. All rights reserved.

3. Marketing channels Marketing Channels are sets of interdependent organizations involved in the process of making a product available for use or consumption.

4. Middlemen Middlemen A business firm that renders services directly related to the sale/purchase of a product as it flows through from producer to consumer You can eliminate middlemen, but not the essential distribution activities they perform

5. Middleman Activities

6. Middleman Activities

7. Distribution Channels DISTRIBUTION CHANNELS People and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user Final Consumer Or Business User Producers Middlemen

8. Major Channels of Distribution

9. Vertical Marketing Systems

10. Choice of Channels: Market Type of Market Number of potential customers Geographic concentration Order size

11. Choice of Channels: Middleman Services provided by middlemen Availability of desired middlemen Producer’s and middlemen’s policies

12. Choice of Channels: Company Desire for channel control Services provided by seller Ability of management Financial resources

13. Intensity of Distribution

14. Conflict in Channels Retailer Retailer Retailer Retailer Horizontal Middlemen of the same type Different types of middlemen on the same level

15. Conflict in Channels Vertical Producer vs. Wholesaler Producer vs. Retailers

16. Who Controls the Channels? Rewards Expertise Sanctions

17. Channel as Partnership Cooperation Collaboration Relationship Marketing Coordination

18. Legal Considerations Exclusive dealing Tying contracts Exclusive territory Refusal to deal