distribution plan week-8 tutorial 12/19/2015dr. yuvaraj 1
TRANSCRIPT
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Distribution Plan
Week-8
Tutorial
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Types of Intermediary
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Agents and brokers
Wholesalers
RetailersFranchisees
Distributors and dealers
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ConsumerProducer Agent Wholesaler Retailer
Producer
Producer
Producer
Wholesaler Retailer Consumer
Retailer Consumer
Consumereg Insurance
eg A pint of beer (UK)
eg Most supermarket goods
eg Imported goods
Consumer Channels
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Producer Industrialcustomereg High value, complex products
Producer Industrialdistributoreg Components via Radio Spares
Industrialcustomer
Producer Agent Industrialcustomer
Producer AgentIndustrialdistributor
Industrialcustomer
Industrial Channels
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How Many Levels?
Considerations: How many customers & where they are How fragile / bulky / valuable the goods Whether offering is a tangible product or a service How much control you want over the contact with
the customer
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Supply chain management: Production
How many items to produce, materials lead times Transportation
Mode, e.g. road, rail, air etc. Facility
Location of factory, warehouse etc. Inventory
How much stock, materials, work-in-progress etc. Communication
Systems for orders, billing, stock control, payment etc.
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Tangible Products
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Which is better?
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Services Distribution
Services are consumed at point of production:
Both provider and consumer are present People are part of the service
Consider: How to make service easily available to target
market How to maintain service quality if intermediaries
are used
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Service Location
How to ensure service is available and accessible to target market
Are customers willing / able to travel for your service
Use of technology, e.g. ATMs, telephone and Internet banking Telephone / Internet travel booking
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Many organisations have multiple distribution systems
Often needed to address needs of different segments, e.g.
Customers can buy BT phones direct from BT via the Internet
BT also sells its phones via third party high street retailers - Dixons, Argos etc. Sales account managers (large industrial customers)
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Managing Distribution
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Selecting Channel Members
Own strengths & weaknesses e.g. company size, brand strength
Channels used by competitors Characteristics of the product / service
Range and nature of tasks needed to move product / service to end customer
Effectiveness of the channel alternatives
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Selecting Channel Members
Effectiveness of the channel: Sales and marketing
e.g. skills, image, coverage, quality of sales staff
Product and service e.g. product knowledge, storage facilities,
quality of service staff Risk and uncertainty
e.g. their stability, track record
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Knowledge Vs Performance
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Reconfiguring the market
Substitute/configured products example email/post.
Disintermediation- removing a part of the channel e-commerce.
Reintermediation- replacing an existing intermediary, EBay, reverse auctions.
Partial channel substitution- some functions of the intermediary lost, Car websites.
Media switching/addition- using the internet as the main means of communication, Dell.
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Channel strategy
Single channel provider Channel migrator- moving from one type to another
Online ticketing, ATM
Activity based strategy- Based upon customer life-cycle. Call centers to take insurance orders
Integrated multi-channel strategy- telephone and internet sales/banking.
Needs based-direct selling versus internet selling Graduated customer value strategy- channel based upon customer financial value.
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How important is it?
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Differences between country markets
Stage of economic development
Market structure and competition
Rate of growth in similar markets
Diverse cultures and languages
Politics, regulations and associated risk
Legal and financial systems and bodies
Business rules and customs
Currency and exchange risks
Customer profiles Data expensive and difficult to obtain
Control & coordination difficult
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Planning Regulations, Tenders/BribesConsideration to Environment,Compliance Issues/H&SLocal Materials, EarthquakesLevel of developmentClimate (Materials required)Level of technological advancementFamily culture (size of house)Amount of available land
Use of Sub ContractorsCommunication/Logistics, Availability and skill/knowledge of labour, Low cost supplier, Cultural differences, Low income, Poor infrastructure/distributionDifferent eating habits (ie more family meals, less packaged food), No fridges/freezers (or electricity)MR difficult
Lesser developed Countries
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Questions?
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