Chapter 13: Distribution Channels and Logistics Management
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Transcript Chapter 13: Distribution Channels and Logistics Management
REVIEW OF DISTRIBUTION
Professor Edward Fox
Cox School of Business
Southern Methodist University
What is a Distribution Channel?
A set of interdependent organizations
(intermediaries) involved in the process of making a
product or service available for use or consumption
by the consumer or business user
What is a Distribution Channel?
CONSUMER GOODS
Direct Channel
Mfgr
Consumer
Indirect Channels
Mfgr
Mfgr
Wholesaler
Mfgr
Wholesaler
Jobber
Retailer
Consumer
Retailer
Consumer
Retailer
Consumer
Most consumer goods channels include a retailer
Adapted from Prentice Hall
Why Do Manufacturers Distribute
Through Retailers?
Greater efficiency in making goods available to
target markets
Enable manufacturers to distribute products more
effectively than they can alone because of retailers’:
Customer relationships
Experience and expertise
Specialization
Provides consumers with variety
One-stop-shopping
Offers a choice
Why Do Retailers Exist?
Make distribution more efficient!
Adapted from Prentice Hall
What Value Do Retailers Add for Consumers?
SERVICE OUTPUTS
Lot Size
Convenience
(Location)
Waiting
Time
Variety
Source: Pete Bucklin
Service Outputs
WHAT DO THEY INVOLVE?
Inventory management
Breaking bulk
Sorting
Stockpiling
Variety management
Geographic distribution
Transportation
Convenient, timely access for the end user