#10 Distribution

Question 1

What is a distribution channel?

Answer 1

A set of interdependent organisations involved in the process of making a product/service available for use by the consumer/business user.

Question 2

Why are marketing intermediaries used?

Answer 2

The use of intermediaries results from greater efficiency in making goods available to target markets through:

• contracts
• experience
• scales of operation
• specialisation

Question 3

How should distribution channels be assigned?

Answer 3

Functions should be assigned to the channel member who can perform them the most effectively and efficiently to provide satisfactory assortments of goods and services to target customers.

Question 4

Channel Behaviour and Conflict

Answer 4

The channel is most effective when:

• each member is assigned to tasks they can do best
• avoid miscommunication through cooperation to satisfy target market

Types of conflict:

• Horizontal (firms at the same level)
• Vertical (different levels of the same channel)

Question 5

Types of Marketing Systems

Answer 5

1. Conventional Marketing System
2. Vertical Marketing System
   - Corporate (common ownership at different levels of the channel)
   - Contractual (agreements among channel members)
   - Administered (leadership is assumed by one)
3. Horizontal Marketing
   - 2 or more companies at one channel level join together (e.g. banks and grocery stores)
4. Hybrid Marketing System
   - A single firm sets up 2 or more marketing channels to reach one or more customer segments (e.g. Sephora shop and online)

Question 6

What is retailing?

Answer 6

Retailing involves all the activities involved in selling goods/services directly to final consumers for their personal, nonbusiness use.

• Store retailing
• Nonstore retailing

Question 7

Nature & Importance of Marketing Logistics

Answer 7

Involves getting the right product to the right customer at the right place and at the right time.

1. Customers service and satisfaction are the cornerstones of marketing strategy
2. Logistics is a very big element of cost
3. Improvements in technology has created opportunities for gains in distribution efficiency

Question 8

Retail Marketing Decisions

Answer 8

1. Retail Strategy - retail positioning and target market

2. Retailer Marketing Mix - 4Ps

Question 9

The Future of Retailing

Answer 9

• New retailing forms
• Intertype competition increase
• E-commerce and technology
• Using retail stores as communities/hangouts