Distribution Policy

Presented by:
Shamli Singhla 24/079
Sakshi 24/157
Vikash Mehta 24/181
 An efficient system provides -
Selling activity
Physical distribution
Services
Information/market feedback
 Manufacturer

Physical Service Information/Market

Selling feedback
distribution s
activities

Customer-user
Task responsibility given to the following-
1. Manufacturer
2. Manufacturers representative:-sales Agent who works
on commission .
3. Merchant middlemen:-
Who takes title to goods purchased for resale.
Most common merchant middlemen are:-
1 Wholesalers.
2 Retailers.
Distribution Scope:
 Exclusive Distribution

One Agent/Retailer Serving A Given Area Is

Granted Sole Rights To Sell The Product
Products That Need To Maintain Aura Of High
Quality And Product Desirability
 Intensive Distribution
Product is available at all possible retail outlets in
wide variety of different & competing institutions in a given
area
Most applicable for convenience goods
(bought on sight vs. sought) affordable, low margin
goods, fast turnover
 Selective Distribution
Several, but not all, outlets distribute a product
Frequently used by shopping goods
(typically sought on basis of attractive price or quality
characteristics)
Ideal situations: Environments where few outlets can
have high sales volume (i.e., adding outlet coverage has
marginal sales increase)
 Cont.

Requires carrying full product line with high service

Outlets should be limited by criteria that meet the
products overall distribution objectives (e.g., inventory level,
customer service, showroom space)
FACTORS INFLUENCING OPTIMAL
DESIGN
Channel
Length
Channel
Breadth
Convenience good Intensive distribution (Shaving
Cream)
Shopping good Selective distribution (Television)

Specialty good Exclusive distribution (Automobile)

 CHANNEL CONFLICT
Channel Conflict is generated when one channel
members action prevent other channel to achieve its goal.
Conflicts can be classified as :

Horizontal

Vertical Multi Channel

Channel
Conflict
Classification
 CONTINUED..

Vertical Conflict occur due to differences in goals and

objectives, misunderstanding and mainly due to poor
communication.
Horizontal Conflict are the conflicts between the channel
members at the same level i.e. two or more retailers, two
or more franchisees etc.
Multi-channel Conflict occurs when the manufacturer
uses a dual distribution strategy i.e. the manufacturer uses
two or more channel arrangements to reach to the same
market.
 ETHICAL ISSUES
Ethical issues arise because channel management
requires balancing the interests of manufacturers,
middlemen and customers.
Some examples when an ethical issues may be
involved in a distribution decision:
Manufacturer or the distributor abusing its power, taking
unfair advantage of other partner?
Are distributors using good name of manufacturer to
persuade customers to do things that are not in their
best interests?
Manufacturer tried to insure that distributors provide
education to insure safe use of its products?
 CONCLUSION
Channel management involves complex web of

personal, economic and legal relationships

The channel decisions once implemented is most

difficult to change in marketing.

Marketing system design must not only consider

current market conditions but also anticipate future

changes in the marketplace.