HOW DOES DISTRIBUTION ADD VALUE

The distribution function using the network of the channel partners adds value to the selling function by providing

Time Place and Possession utility to the consumer. Ex : Buy a television

DISTRIBUTION CHANNEL STRATEGY

Corporate strategy

Marketing strategy

Distribution strategy

THE DISTRIBUTION STRATEGY COULD BE LOOKING AT SOME OF THESE FACTORS

1. Customer service levels

2. Setting distribution objectives

3. Set of activities

4. The distribution organization

5. Policy and procedure

6. Key performance indicators

7. Critical success factors

CUSTOMER SERVICE LEVELS

The nature of the industry in which the company is operating, its products and services, its market share and the nature of competition help define the level of customer service the firm can promise its customers.

SETTING DISTRIBUTION OBJECTIVES

The customers also have certain expectations from the company and its channel partners

Ex: Retailers selling HUL products would want the company and its distributors to service them in such a way that they hold minimum stocks and at the same time never run out of stocks.

SET OF ACTIVITIES

This task is normally performed jointly by the company sales personnel along with the channel partners. Some of these steps could be.

Periodic sales forecasts by geography Collecting of sales proceeds Carrying out promotional activities

THE DISTRIBUTION ORGANISATION

The firm has to now determine as to who will do what. this step will healp define the organisation structure to support the entire strategy.

Selecting clear objectives for each of the channel partners and systems to monitor the activities and measure the performance of the channel partners.

POLICY AND PROCEDURE

It is expected that the company sales personnel and its channel partners understand what is expected of them and discharge their roles and responsibilities faithfully.

The operations manual is capable of answering any query on procedure which the sales people or the channel

KEY PERFORMANCE INDICATORS

The effectiveness of the strategy can only be judged if the company has agreed on certain measurement criteria with its channel partners

Some of the most popular K P I are Achievement of market shares Zero complaints from the customers Market coverage with ready stocks Minimize damages to products

CRITICAL SUCCESS FACTORS

The distribution strategy also will be successful if it has the support and backing of the top management of the company.

Some of the CSF are Clear, transparent and unambiguous policy and

procedure. Fair dealing of the company with all its partners. Clearly defined customer service policy.

AN OVERVIEW OF DISTRIBUTION CHANNELS

A distribution channel is a group of people and firm involved in the transfer of title or ownership as the product moves from the producer to ultimate consumer.

DISTRIBUTION CHANNELS CAN BRODLY BE CLASSIFIED AS

Sales channel Delivery channel Service channel

SALES CHANNEL

Which has the function of motivating buyers, sharing information between the consumer and the company,negotiationg fair bargains for the consumer and financing the transaction.

DELIVERY CHANNEL

Which is only meant for physical transactions.

SERVICE CHANNEL

Which performs after sales service like a Maruti service station