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_12_ Placement or Distribution


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Distribution / Placement
   It is the system of moving Goods &

   It can also be termed as placement of goods
    and services from producers to the
Distribution / Placement
   Distribution Channels: These are the systems of
    moving goods and services from producers to consumers.
   These can also be termed as ‘Marketing Channels’.

   Distribution Mix: A combination of channels used by
    producers to get their products to a consumer.

   Distribution Strategy: It as an overall plan for moving
    products to intermediaries and final consumers.
Marketing Intermediaries
    These are business people and organizations that move
     goods and services from producers to end consumers.

    These intermediaries create three kinds of utility for the
     producer as well as for the consumer.

    These utilities being:
1)   Place
2)   Time
3)   Possession.
Types of Intermediaries
   Basically there are three types of Intermediaries.

   Distributors: They distribute the product in their allotted
   Wholesaler: These are firms or people who buy from the
    companies in bulk to sell to other companies or
   Retailer: These are firms or individuals who directly sell
    to public or as we call consumers.
Marketing Intermediaries
   What do these Marketing Intermediaries do?

   Provide sales force
   Provide market information
   Provide promotional support
   Sorting, standardizing & dividing
   Carrying stock
   Delivering the product
   Assuming risk
   Providing financing
   Buying
Alternative Channels of Distribution
   Consumer goods, Organizational goods and services each
    has its own characteristics and types of distribution

   Consumer goods require the most number of
    intermediaries and

   services on the other hand require just one, or few or
    absolutely none.
Channels for Consumer Goods
   Producer to Consumer

   Producer to Retailer to Consumer

   Producer to Wholesaler to Retailer to Consumer.
Channels for Organizational Goods
   The best approach in such goods is the direct distribution
    from producer to consumer. B2B

   Channels for Services

   More services are distributed directly by the producer to
    the user because direct contact between both is required.

   Some service businesses require an intermediary as a
    broker or agent to distribute services.
Channel Selection
   While Selecting a channel we must consider the

   Market Coverage

   Cost

   Control
Market Coverage
   Intensive Distribution: A distribution style in which the
    product is placed in as many as outlets as possible.

   Selective Distribution: A distribution style in which only
    a limited number of outlets are used to place the product.

   Exclusive Distribution: A distribution style in which
    intermediaries are given the exclusive right to sell a
    product within a market.
   The transportation cost is the highest cost in the
    distribution process and is almost 60% of the total
    distribution cost.

   Transportation is the most vital link in the supply

   A company must have a reliable transport system.

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