Chap 16 distribution strategies

Channel-Structure Strategy TM 16-11.. Multiple-Channel Strategy TM 16-4 1.. Channel-Modification Strategy TM 16-5 E.. Channel-Control Strategy TM 16-6 F... CHAPTER 16: Distribution Strat

A Channel-Structure Strategy (TM 16-1)

1 Direct Distribution

2 Indirect Distribution

B Distribution-Scope Strategy (TM 16-2 and TM 16-3)

1 Exclusive Distribution

2 Intensive Distribution

3 Selective Distribution

C Multiple-Channel Strategy (TM 16-4)

1 Complementary Channels

2 Competitive Channels

D Channel-Modification Strategy (TM 16-5)

E Channel-Control Strategy (TM 16-6)

F Channel-Conflict Strategy (TM 16-7)

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CHAPTER 16: Distribution Strategies 619

16-1

CHANNEL-STRUCTURE STRATEGY

Typical Channel Structures

Source: Gary L Frazier, “Designing Channels of Distribution,” The Channel for

Communication (Seattle, Wash.: Center for Retail and Distribution Management, University of

Washington, 1987), pp 3–7.

CHANNEL MATRIX

Specificity

Customer

Level

Customer

Level

CHAPTER 16: Distribution Strategies 621

16-3

DISTRIBUTION-SCOPE STRATEGY

For an efficient channel network, the manufacturer

should clearly define the target customers it

intends to reach The strategic alternatives here

are exclusive distribution, selective distribution, and

intensive distribution

16-4

MULTIPLE-CHANNEL STRATEGY

The multiple-channel strategy refers to a

situa-tion in which two or more different channels are

employed for distribution of goods and services

The market must be segmented so that each

segment is provided the services it needs

and pays for them, but is not charged for

services it does not need

CHANNEL-MODIFICATION STRATEGY

Reasons for a shift in existing channels include:

 Changes in consumer markets and buying

habits

 Development of new needs in relation to service,

parts, or technical help

 Changes in competitors’ perspectives

 Changes in relative importance of outlet types

 Changes in manufacturer’s financial strength

 Changes in the sales volume level of existing

products

 Changes in product (addition of new products),

price (substantial reduction in price to gain

dominant position), or promotion (greater

emphasis on advertising) strategies

CHAPTER 16: Distribution Strategies 623

16-6

CHANNEL-CONTROL STRATEGY

Vertical marketing systems may be defined as

professionally managed and centrally programmed

networks that are pre-engineered to achieve

opera-ting economies and maximum market

impact Stated alternatively, vertical marketing

systems are rationalized and capital-intensive

networks designed to achieve technological,

managerial, and promo-tional economies through

the integration, coordina-tion, and synchronization

of marketing flows from points of production to

points of ultimate use

They can be classified as:

 Corporate

 Administered

 Contractual

CHANNEL-CONFLICT STRATEGY

Channel conflict may be defined as a situation in

which one channel member perceives another

channel member(s) to be engaged in behavior that

is preventing or impeding it from achieving its

goals Disagreement between channel members

may arise from incompatible desires and needs