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Lecture 10 - Distribution & Logistics Strategies
Distribution and logistics
Marketing channels are structures linking groups of individuals or organisations through which a
product or service is made available to the consumer or industrial user (Brassington & Pettitt 2000)
Intermediaries consist of wholesalers, retailers, distributors and dealers, agents and broker,
franchises and the internet

Distribution system design
Factors influencing channel structure are:
- Choice of outlets
- Consumer concentration: where the consumers will be
- Product characteristics: perishable/ industrial
- Economic and legal restrictions
Strategic channel choices

- Intensive distribution
- Selective distribution
- Exclusive distribution

There are different types of channels

- Physical flow - the physical movement of goods
- Title flow - the passage of ownership, such as car
- Information flow - feedback and exchange of information
Vertical marketing systems
Corporate marketing systems
Franchise systems
Co-operative and voluntary groups
Strategic Issues in channels can be caused by management conflicts such as:
Goal incompatibility
Position, role and domain incongruence
Communication breakdown
Ideological differences

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Other issues can be growth of multi-channels and E-commerce
Buyer’s perspective of distribution
Availability
Speed
Reliable
Range of choice
Empathy when supply is interrupted
Convenience
Service and support
Good price

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The primary concerns of buyers are access, search, possession and transaction
Channel design decisions are based on

- Analysis of customer service needs - identifying the market channels that can deliver
appropriate value to customer
- Defining channel objectives and constraints - which segments should we serve and which
channel to use for each
- Identifying key channel alternatives - direct marketing, brokers, agents, whole sellers, retailers,
e-commerce
- Evaluate alternatives - economic, control, level of flexibility

The integrated marketing effort model looks are both the marketing aspect and physical
distribution efforts of marketing as a whole
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It can act as a competitive advantage if the system is efficient and customer service is valued

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