735:, the marketer promotes the product directly to consumers hoping that they will pressure retailers to stock the product or brand, thereby pulling it through the distribution channel. The choice of a push or pull strategy has important implications for advertising and promotion. In a push strategy, the promotional mix would consist of trade advertising and sales calls while the advertising media would normally be weighted toward trade magazines, exhibitions, and trade shows while a pull strategy would make more extensive use of consumer advertising and sales promotions while the media mix would be weighted toward mass-market media such as newspapers, magazines, television, and radio.
471:
744:
958:
759:, also known as a distribution channel. A marketing channel is the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer. This is mostly accomplished through merchant retailers or wholesalers or, in the international context, by importers. In certain specialist markets, agents or brokers may become involved in the marketing channel: for example in the
888:
849:) channel has two intermediaries, and so on. This flow is typically represented as being manufacturer to retailer to consumer, but may involve other types of intermediaries. In practice, distribution systems for perishable goods tend to be shorter - direct or single intermediary, because of the need to reduce the time a product spends in transit or in storage. In other cases, distribution systems can become quite complex involving many levels and different types of intermediaries.
817:
974:) as well as changes in the legal or statutory environment. For instance, in Australia and New Zealand, following a relaxation of laws prohibiting supermarkets from selling therapeutic goods, consumers have gradually switched away from pharmacies and toward supermarkets for the purchase of minor analgesics, cough and cold preparations and complementary medicines such as vitamins and herbal remedies.
602:
554:. At the strategic level, as well as deciding whether to distribute directly or via a distribution network, there are three broad approaches to distribution, namely mass, selective and exclusive distribution. The number and type of intermediaries selected largely depends on the strategic approach. The overall distribution channel should add value to the consumer.
669:
work closely with the manufacturer and add value to the product through service level, after sales care or client support services. Another definition of exclusive arrangement is an agreement between a supplier and a retailer granting the retailer exclusive rights within a specific geographic area to carry the supplier's product.
899:
of product. Care must be exercised when considering negative actions as these may fall foul of regulations and can contribute to a public backlash and a public relations disaster. Manufacturer complacency has been highlighted as a risk leading distributors to move their business to other supply lines.
965:
Channel-switching (not to be confused with zapping or channel surfing on TV) is the action of consumers switching from one type of channel intermediary to a different type of intermediary for their purchases. Examples include switching from brick-and-mortar stores to online catalogues and e-commerce
898:
To motivate intermediaries the firm can use positive actions, such as offering higher margins to the intermediary, special deals, premiums and allowances for advertising or display. On the other hand, negative actions may be necessary, such as threatening to cut back on margin, or hold back delivery
857:
In practice, many organizations use a mix of different channels; a direct sales force may call on larger customers. This may be complemented with other agents to cover smaller customers and prospects. When a single organization uses a variety of different channels to reach its markets, this is known
995:
perspective has focused scholarly attention on how distribution networks serve to create customer value and to consider how value is co-created by all the players within the distribution chain, including the value created by customers themselves. This emphasis on value-creation is contributing to a
982:
is undergoing fundamental changes. A consumer may be prompted to switch channels when the product or service can be found at cheaper prices, when superior models become available, when a wider range is offered, or simply because it is more convenient to shop through a different channel (e.g. online
878:
The firm's marketing department needs to design the most suitable channels for the firm's products, then select appropriate channel members or intermediaries. An organization may need to train staff of intermediaries and motivate the intermediary to sell the firm's products. The firm should monitor
929:
that distributors needed support in a range of practical areas if they were going to be successful in connecting with housing developers, and instituted "Housing Guilds" which brought together the distributor (as the materials supplier), design services, sub-contractors, local realtors and housing
1022:
Disintermediation occurs when manufacturers or service providers eliminate intermediaries from the distribution network and deal directly with purchasers. Disintermediation is found in industries where radically new types of channel intermediaries displace traditional distributors. The widespread
668:
In an exclusive distribution approach, a manufacturer chooses to deal with one intermediary or one type of intermediary. The advantage of an exclusive approach is that the manufacturer retains greater control over the distribution process. In exclusive arrangements, the distributor is expected to
907:
Channel conflict can arise when one intermediary's actions prevent another intermediary from achieving their objectives. Vertical channel conflict occurs between the levels within a channel, and horizontal channel conflict occurs between intermediaries at the same level within a channel. Channel
781:
A merchant intermediary who sells chiefly to retailers, other merchants, or industrial, institutional, and commercial users mainly for resale or business use. The transactions are B2B (Business to
Business). Wholesalers typically sell in large quantities. (Wholesalers, by definition, do not deal
597:
to achieve in broad terms. The approach to distributing products or services depends on a number of factors including the type of product, especially perishability; the market served; the geographic scope of operations and the firm's overall mission and vision. The process of setting out a broad
966:
providers; switching from grocery stores to convenience stores or switching from top tier department stores to mass market discount outlets. A number of factors have led to an increase in channel switching behaviour; the growth of e-commerce, the globalization of markets, the advent of
795:
An intermediary who is authorized to act for a principal in order to facilitate exchange. Unlike merchant wholesalers and retailers, agents do not take title to goods, but simply put buyers and sellers together. Agents are typically paid via commissions by the principal. For example,
641:
A manufacturer may choose to restrict the number of outlets handling a product. For example, a manufacturer of premium electrical goods may choose to deal with department stores and independent outlets that can provide added value service level required to support the product.
806:
A special type of wholesaler, typically one who operates on a small scale and sells only to retailers or institutions. For example, rack jobbers are small independent wholesalers who operate from a truck, supplying convenience stores with snack foods and drinks on a regular
731:, the marketer uses intensive advertising and incentives aimed at distributors, especially retailers and wholesalers, with the expectation that they will stock the product or brand, and that consumers will purchase it when they see it in stores. In contrast, in a
930:
financiers. Laurence C. Hart refers to the extensive development of these guilds and the "Training
Schools" which they operated, converting these into a radio-based program from 1942. Hart, who worked for the supplier, put this experience forward to the
908:
conflict is a perennial problem. There are risks that a powerful channel member may coordinate the interests of the channel for personal gain. Territories are often seen as a source of conflict, sometimes because boundaries are only loosely defined.
824:
A firm can design any number of channels they require to reach customers efficiently and effectively. Channels can be distinguished by the number of intermediaries between producer and consumer. If there are no intermediaries then this is known as a
1010:, which utilizes both direct online distribution alongside bricks and mortar stores, now calls its distribution centers "customer fulfillment centers". Although the term "customer fulfillment center" has been criticized on the grounds that it is a
711:
The producer selects only very few intermediaries. Exclusive distribution occurs where the seller agrees to allow a single retailer the right to sell the manufacturer's products. This strategy is typical of luxury goods retailers such as
977:
For the consumer, channel switching offers a more diverse shopping experience, which may concern some sellers by its potential to erode market share. Evidence of channel switching can suggest that disruptive forces are at play, and that
702:
The producer relies on a few intermediaries to carry their product. This strategy is commonly observed for more specialised goods that are carried through specialist dealers, for example, brands of craft tools, or large appliances.
623:): When products are destined for a mass market, the marketer will seek out intermediaries that appeal to a broad market base. For example, snack foods and drinks are sold via a wide variety of outlets including supermarkets,
788:
A merchant intermediary who sells direct to the public. There are many different types of retail outlet - from hypermarts and supermarkets to small, independent stores. The transactions in this case are B2C (Business to
1169:
In South Jersey, the area has become the "epicenter" of warehouse construction in the greater
Philadelphia region..."Activity in the Southern New Jersey industrial market continues to amaze," the report
694:
The producer's products are stocked in the majority of outlets. This strategy is common for mass-produced products such as basic supplies, snack foods, magazines and soft drink beverages.
1156:
1023:
public acceptance of online shopping has been a major trigger for disintermediation in some industries. Certain types of traditional intermediaries are dropping by the wayside.
1518:, Armonk, New York, ME Sharpe, 2006, pp 139–149; Tokman, M., and Beitelspacher, L. S., "Supply Chain Networks and Service-dominant Logic: Suggestions for Future Research",
1514:
Flint, D. J., and
Mentzer, J. T., "Striving for Integrated Value Chain Management Given a Service-dominant Logic for Marketing", In R. F. Lusch and S. L. Vargo (Eds.),
767:
has noted that "insurance and reinsurance intermediaries play a central role in the distribution of insurance and reinsurance products" . The EU introduced the
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569:
manner. In the case of services, distribution is principally concerned with access. Although distribution, as a concept, is relatively simple, in practice
1472:
1224:
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Companies wishing to grow through sales to new markets may need to identify and develop relationships with local distributors, for example to support
1152:
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or one-stop shopping). As a hedge against market share losses due to switching behaviour, some retailers engage in multi-channel retailing.
662:, insist that sales staff are trained to use the product range. The manufacturer will only allow trained clinicians to sell their products.
1602:
1561:
See for example, "Placement: Customer Value
Fulfilment", Chapter 10 in Gary Armstrong, Stewart Adam, Sara Denize, and Philip Kotler,
926:
646:
orthopedic sandals, for example, only sell their product through pharmacies because this type of intermediary supports the desired
961:
The advent of "category killers", such as
Australia's Officeworks, has contributed to an increase in channel switching behaviour.
635:
and others. The choice of distribution outlet is skewed toward those that can deliver to mass markets in a cost efficient manner.
605:
In an intensive distribution approach, the marketer relies on chain stores to reach broad markets in a cost efficient manner.
515:. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or
17:
1336:
Directive (EU) 2016/97 of the
European Parliament and of the Council of 20 January 2016 on insurance distribution (recast)
457:
1430:
1617:
1290:
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which can be used by manufacturers outside the region to increase their regional market penetration and grow sales.
870:, the removal of intermediaries from a supply chain. Retailing via smartphone or m-commerce is also a growth area.
768:
1033:
486:
1014:, its use is becoming increasingly mainstream as it slowly makes its way into introductory marketing textbooks.
1058:
931:
570:
1449:
507:
is the process of making a product or service available for the consumer or business user who needs it, and a
470:
1469:
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1002:
727:
In consumer markets, another key strategic level decision is whether to use a push or pull strategy. In a
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is fundamentally concerned with ensuring that products reach target customers in the most direct and
651:
1398:
1053:
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change in terminology surrounding distribution processes; "distribution networks" are often termed
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1250:
Kotler, Keller and Burton, 2009. Marketing
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585:
as well as channel management, including selection of channel members and rewarding distributors.
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as "an outstanding example of manufacturer-distributor collaboration on an industry-wide basis".
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1260:
1038:
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1414:"Essentials of Successful Marketing: A Case History in Manufacturer-Distributor Collaboration"
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statement of the aims and objectives of a distribution channel is a strategic level decision.
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223:
135:
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are paid a commission of around 15% for each booking made with an airline or hotel operator.
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positioning of the product. Some of the prestige brands of cosmetics and skincare, such as
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Decisions about distribution need to be taken in line with a company's overall strategic
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This article is about marketing distribution strategies. For goods distribution, see
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the channel's performance over time and modify the channel to enhance performance.
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1153:"Report details surge in a warehouse construction as residents fight sprawl"
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Before designing a distribution system, the planner needs to determine what
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1105:
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and warehouse construction and distribution to a market to the
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1261:"Intensive Distribution: Definition, Strategy & Examples"
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601:
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218:
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Strategically, there are three approaches to distribution:
1540:
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Typical intermediaries involved in distribution include:
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is a business involved in the distribution stage of the
945:, for example, many distributors have a head office in
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distribution network. In addition, online retailing or
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Difference between an agent, distributor and franchise
1574:
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1000:while "distribution centers" are often termed
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451:
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1209:Marketing: Origins, Concepts, Environment,
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1066:in supply chain management and logistics
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469:
1544:] Arrival is Going to be Massive",
1283:The Practice of Supply Chain Management
894:' food hall, a major retailer in London
841:) channel has a single intermediary. A
14:
1610:
1381:Managing Distributors in B2B Marketing
1375:
1373:
27:Making products available to customers
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523:) is one of the four elements of the
1598:entrepreneur.com Distribution Models
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952:
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24:
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811:
527:: the other three elements being
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1006:. For example, the retail giant
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1034:Lists of distribution companies
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1059:Distribution resource planning
932:American Marketing Association
925:noted in the years before the
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13:
1:
1185:, Kogan Page, 2011, Chapter 1
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882:
820:Types of distribution systems
588:
557:
1363:Merriam-Webster Dictionary,
1003:customer fulfillment centers
7:
1316:Financial Conduct Authority
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1026:
902:
747:A wholesale fish market at
739:Channels and intermediaries
10:
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1075:Good distribution practice
782:directly with the public).
382:Promotional representative
29:
1367:, accessed 1 January 2023
1354:, accessed 1 January 2023
970:(such as Officeworks and
911:
1618:Distribution (marketing)
1594:(archived 25 April 2012)
1054:Distribution (economics)
581:, warehousing, storage,
1576:Principles of Marketing
1563:Principles of Marketing
1436:Invest Northern Ireland
1306:Routledge, 2002, p. 295
1196:Principles of Marketing
927:US entered World War II
917:Distributor development
829:distribution system or
708:Exclusive distribution
699:Selective distribution
691:Intensive distribution
666:Exclusive distribution:
639:Selective distribution:
571:distribution management
377:Promotional merchandise
362:Out-of-home advertising
151:Account-based marketing
1039:Agricultural marketing
993:service-dominant logic
962:
895:
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752:
621:intensive distribution
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186:Horizontal integration
1401:Philosophical Reviews
1220:Business Dictionary,
1155:. NJ Spotlight News.
1091:Third-party logistics
960:
890:
819:
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604:
473:
372:Product demonstration
224:Corporate anniversary
1418:Journal of Marketing
1044:All commodity volume
595:distribution channel
583:inventory management
487:East Coast epicenter
387:Visual merchandising
317:Behavioral targeting
191:Vertical integration
171:Influencer marketing
18:Distribution company
1466:Roy Morgan Research
1379:B2B International,
1070:Extended enterprise
1064:Document automation
991:The emergence of a
941:to new markets. In
679:
519:. Distribution (or
337:In-game advertising
327:Display advertising
203:Promotional content
1628:Service industries
1475:2016-10-06 at the
1352:"wholesaler, noun"
1285:, Springer, 2003,
1227:2020-09-27 at the
980:consumer behaviour
963:
896:
874:Channel management
837:(sometimes called
822:
753:
678:
625:convenience stores
607:
552:strategic planning
502:
420:Marketing research
357:Online advertising
347:Native advertising
342:Mobile advertising
294:Sex in advertising
111:Consumer behaviour
32:business logistics
1131:Value proposition
1018:Disintermediation
953:Channel switching
868:disintermediation
845:(alternatively a
757:marketing channel
720:
719:
614:Mass distribution
498:metropolitan area
468:
467:
430:Consumer research
311:Promotional media
299:Underwriting spot
274:Product placement
254:On-hold messaging
244:Loyalty marketing
161:Product marketing
156:Digital marketing
16:(Redirected from
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1552:, 22 August 2017
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425:Mystery shopping
322:Brand ambassador
259:Personal selling
249:Mobile marketing
229:Direct marketing
214:Ambush marketing
181:Annoyance factor
166:Social marketing
116:Consumer culture
96:Brand management
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1265:. Retrieved
1255:
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1207:Wright, R.,
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1161:. Retrieved
1146:
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998:value-chains
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763:sector, the
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723:Push vs pull
673:
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652:Estee Lauder
647:
644:Dr. Scholl's
638:
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563:Distribution
561:
541:
520:
508:
505:Distribution
504:
503:
495:Philadelphia
483:South Jersey
141:Segmentation
66:Distribution
60:Key concepts
1302:Varey, E.,
1267:February 3,
1121:Value chain
853:Channel mix
779:Wholesaler:
686:Definition
648:therapeutic
513:value chain
509:distributor
234:Franchising
209:Advertising
176:Attribution
101:Co-creation
1612:Categories
1399:Notre Dame
1181:Dent, J.,
1163:January 3,
1138:References
972:Kids 'R Us
883:Motivation
864:e-commerce
827:zero-level
789:Customer).
633:cafeterias
589:Strategies
558:Definition
500:and beyond
392:Web banner
279:Propaganda
86:Activation
50:Management
1546:News.com,
1111:Promotion
1096:Marketing
1086:Logistics
1012:neologism
947:Singapore
843:level two
835:level one
786:Retailer:
761:insurance
683:Approach
575:logistics
537:promotion
491:logistics
485:, a U.S.
475:Warehouse
352:New media
284:Publicity
136:Promotion
121:Dominance
41:Marketing
1473:Archived
1225:Archived
1157:Archived
1027:See also
903:Conflict
847:two-tier
839:one-tier
660:Clinique
656:Jurlique
477:storing
409:Research
264:Premiums
219:Branding
146:Strategy
1332:EUR-Lex
1106:Pricing
892:Harrods
804:Jobber:
751:, China
548:mission
533:pricing
529:product
479:granite
81:Service
71:Pricing
1289:
1116:Retail
1008:Amazon
939:export
912:Trends
807:basis.
793:Agent:
544:vision
535:, and
269:Prizes
131:Ethics
76:Retail
1633:Trade
1453:(PDF)
1170:said.
1077:(GDP)
1049:Cargo
858:as a
714:Gucci
521:place
239:Label
1287:ISBN
1269:2016
1165:2023
833:. A
658:and
546:and
489:for
1541:sic
481:in
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