Distribution

Management

Sales & Distribution

Session III
18th August 2008

1
Distribution
Management
• Distribution Network
• Distribution Logistics
• Distribution Account

2
Importance of Channel
Network
• Serve Markets
• Make markets

• Push Strategy
• Pull Strategy

3
Channel Members

• Agents
• Wholesalers
• Retailers
• Stockiest
• C & F Agent
• Dealer

4
Channel Development
depends on 
• Shopping styles
• Habitual Shoppers
• High Value Deal seekers
• Variety Loving Shoppers
• High Involvement Shopping

5
How do you determine
the Network
• Identify the Target market

• Design the supply chain

6
The Role of Distribution
Channel
Intermediaries brings in pooled
financial resources
Help break Bulk and create
assortments
Normally more cost effective due
to specialization
Handling small value items
7
Channel Functions and
Flows
• Gather information on current customers
/ Competition offers
• Develop and disseminate persuasive
communication to promote sales
• Reaching Price points
• Order to the manufacturer
• Acquire finances
• Assume risk related to uncertainity of
sales

8
Channel functions 
continued
• Arrange for storage and
subsequent movement fo Goods
& Services
• Payments
• to the manufacturer
• From the intermediaries
• Export obligations

9
Physical Flow
Channel Levels
Manufacturer

Transport Logistics

C & F Agents

Distributors - Wholesalers

Retailers - Chains

Consumer

10
Service Output Levels

• Lot Size
• Waiting and Delivery Time
• Spatial Convenience
• Product variety
• Service Backup

11
Selecting Channel
members

12
Motivating Channel
members
• Coercive Power – threaten
• Reward Power – extra benefits
• Legitimate Power – code of
conduct
• Expert Power – special
knowledge
• Referent Power – taking names

13
Channel Integration

• Conventional Marketing System

• Independent Producer
• Independent Wholesaler
• Independent Retailer
• Vertical Marketing System
• Channel Captain / Franchisee

14
Channel Conflicts

• Vertical Channel Conflicts

• Horizontal Channel Conflicts

• Multichannel Conflicts

15
Causes of Channel
Conflicts
• Goal Incompatibility

• Unclear Roles and Rights

• Differences in Perception

• Dependence

16
Managing Channel
Conflicts
• Creating SUPER ORDINATE Goals

• Exchange persons between two or more

channel levels

• Co-optation – inclusion of a channel

member to be an advisor etc.

• Diplomacy / Mediation / Arbitration

17