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PLACEMENT / DISTRIBUTION Distribution / Placement It is the system of moving Goods & Services. It can also be termed as placement of goods and services from producers to the consumers. 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 areas. Wholesaler: These are firms or people who buy from the companies in bulk to sell to other companies or organizations. 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 channel. 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 following: 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. Transportation 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 chain. A company must have a reliable transport system.
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