Methods of Distribution in Marketing

Rahima Tukur

Management- 15/0102

What is Marketing?• Marketing is the

management process responsible for identifying, anticipating, and satisfying customer requirements profitably.

• Its goal is to attract new customers by promising superior value and to keep current customers by delivering satisfaction.

Distribution and Distribution Channels

• Distribution is a set of interdependent organisations involved in the process of making a product available for use by the consumer or business user.

• The channel of distribution is therefore those organisations through which a product must pass between its point of production and consumption.

The Role of Intermediaries

In distribution channels, intermediaries buy large quantities of many producers & break them down into the smaller quantities and broader assortments wanted by consumers.

A.Number of contacts without a distributor (M x C= 3 X3=9

Number of contacts with a distributor (M+ C= 3+3= 6)

M= Manufacturer C= Consumer D= Distributor

NUMBER OF CHANNEL LEVELS

• Each layer of Marketing intermediaries that performs some work in bringing the product and its ownership closer to final buyer is a Channel Level.

• Consumer Distribution Channel• Industrial Distribution Channel

1.     Consumer Distribution Channel:

• Channel 1- Direct Marketing Channel(no Intermediary level)

• Channel 2- Indirect Marketing(One Intermediary level)

• Channel 3- Indirect Marketing(Two Intermediary level)

• Channel 4- Three Intermediary level)

Consumer Marketing Channels

2.     Industrial Distribution Channel:

Business marketer

Business customer

Industrial distributors

Business customer

Organisational Channels of distribution

• New channel organisations have evolved to challenge conventional channels. A recent one is the VMC to challenge CMC.

Types of Vertical Marketing Systems

• Corporate VMS- Conflict management & co-ordination are attained through common ownership at different levels of the channel

• Contractual VMS- Independent organisations at different levels of production & distribution, which join together through contract to obtain more economies or sales impact than each could achieve.

• Administered VMS- Co-ordinates successive stages of production & distribution through size &power of one of the parties.

Horizontal Marketing System

Two or more companies at one level join together to follow a new marketing opportunity.

Hybrid Marketing System

• Occurs when a single firm sets up two or more marketing channel to reach one or more customer segments.

 

Hybrid Marketing Channels