DISTRIBUTION CHANNEL.

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1 DISTRIBUTION CHANNEL

2 Most producers use intermediaries to bring their products to market.
They try to forge a distribution channel- a set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

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4 Why Are Marketing Intermediaries used ?
- using intermediaries can provide economies. - the role of marketing intermediaries is to transform the assortments of products made by producers into the assortments wanted by consumers.

5 - Producers make narrow assortments of products in large quantities, but consumers want broad assortments of products in small quantities. Intermediaries buy large quantities from many producers and break them down into the smaller quantities and broader assortments wanted by consumers.

6 Thus, intermediaries play an important role in matching supply and demand.

7 Retail stores,hotels,banks,hospitals,schools, fire stations, polling stations, etc, must be put at a proper place.

8 Distribution Channel Functions :
- moves goods and services from producers to consumers. - Information : gathering and distributing marketing research and intelligence information.

9 - Promotion : developing and spreading persuasive communications about an offer.
- Contact : finding and communicating with prospective buyers. - Matching : shaping and fitting the offer to the buyer’s needs. - Negotiation : reaching an agreement on price and other terms of the offer.

10 Physical distribution : transporting and storing goods.
Financing : acquiring and using funds to cover the cost. Risk taking : assuming the risks of carrying out the channel work.

11 Number of channel levels :
Can be described by the number of channel levels involved.

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13 Channel 1 : called a Direct Marketing Channel, has no intermediaries levels. It consists of a company selling directly to consumers. E.g : Avon, Amway, Tupperware.

14 Channel 2 : contains 1 intermediary level.
This level is typically a retailer.E.g : TV, cameras, tires, furniture , major appliances, sell the goods directly to large retailers such as : Wal Mart, Electronic city.

15 Channel 3 : Contains 2 intermediary levels : wholesaler and retailer. This channel is often used by small manufacturers of food, drugs, hardware and other products.

16 Channel 4 : Contains 3 intermediary levels : In the meat packing industry , jobbers buy from wholesalers and sell to smaller retailers who are not served by wholesalers

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18 Channel Behavior : ( Dinamika Saluran ) :

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20 Conventional Marketing System :
( Conventional Marketing Channel ) Terdiri dari 1 produsen independen, pedagang besar, pengecer, yang masing-masing merupakan entitas terpisah yang bertujuan memaksimumkan laba sendiri. Tidak ada anggota saluran yang memiliki pengendalian penuh atau besar atas anggota lainnya. Contoh : WOI adl distributor lepas dari Infood.

21 Sistem Pemasaran Vertikal, sebaliknya : terdiri dari produsen, pedagang besar,
dan pengecer yang bertindak sebagai suatu sistem yang menyatu. Contoh : Konimex ( produsen ), juga memiliki Marga Nusantara Jaya sebagai distributor permennya, dan Sinar Intermark sebagai distributor obatnya.

22 Dalam VMS, 1 anggota saluran memiliki yang lain atau memberi hak pada yang lain sehingga mereka semua saling bekerja sama.

23 Ada 3 jenis VMS : - VMS korporat - VMS Teradministrasi - VMS Kontraktual : 1.Jaringan suka rela yang disponsori oleh pedagang besar. 2. Koperasi pengecer. 3. Jaringan wara laba.

24 VMS Korporat ( VMS Corporate ) : menggabungkan serangkaian tahap produksi dan distribusi di bawah kepemilikan tunggal. Contoh : Giant Food Stores mengoperasikan fasilitas pembuatan es, operasi pembotolan minuman ringan, pabrik pembuatan es krim dan toko roti.

25 VMS Teradministrasi : ( Administered VMS ) mengkoordinasi serangkaian tahap produksi dan distribusi tidak melalui kepemilikan biasa tapi lewat besarnya dan kekuatan salah satu anggota.

26 Produsen merek yang dominan mampu mengamankan kerja sama perdagangan yang kuat dan dan dukungan darim para penjualnya. Contoh : Kodak, Gillette, P&G : bisa mengatur pajangan, rak, promosi dan kebijakan harga.

27 Horizontal Marketing Systems :
2 perusahaan atau lebih yang tidak berhubungan menggabungkan sumber daya atau program untuk mencari peluang baru. Contoh : Phillsbury dan Kraft Foods. Sony dan Ericson.

28 Hybrid Marketing Systems :
( Hybrid Marketing Channel ) is a system, in which a single firm sets up 2 or more marketing channels to reach one or more customer segments.

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30 Horizontal Conflicts :
occur among firms at the same level of the channel.E.g : some Ford dealers complain about other dealers in the city who steal sales from them by being too aggressive in their pricing and advertising or by selling outside their territories.

31 Vertical conflict : Conflict between different levels of the same channel. e. g : Herman Miller ( office Furniture maker ) created conflict with its dealer when it opened an online store.

32 Wicaksana Overseas Import Vs Indofood.

33 Channel Design decision

34 In designing marketing channels, manufacturers struggle between :
- what is ideal - what is practical

35 Designing on the best channels might not be a problem
Designing on the best channels might not be a problem. The problem might simply how to convince one or a few good intermediaries to handle the line.

36 Designing a channel system calls for :
1. Analyzing consumer service needs 2. Setting channel objectives and constraints. 3. Identifying major alternatives 4. Evaluating major alternatives

37 Analyzing Consumer Service Needs :
Marketing channels = Customer Value Delivery Systems, in which each channels starts with finding out what targeted consumers want from the channel.

38 - Do consumers want to buy from nearby
locations. - Are they willing travel to more distant centralized locations ? - would they rather buy in person , over the phone, through the mail or via internet ?

39 - Do they value breadth assortment or do
they prefer specialization ? - Do they want many add-on services ( delivery, credit, repairs, installation ) or will they obtain elsewhere ? - The faster the delivery, the greater the assortment provided, and the more add- services supplied, the greater the channel’s service level.

40 Setting Channel Objectives and Constraints :
The company’s channel objectives are influenced by the nature of the company, its products, marketing intermediaries, competitors, and the environment.

41 Companies selling perishable products may require more direct marketing to avoid delays and too much handling. In some cases a company may want to compete in or near the same outlets that carry competitors’ product. In other cases producers may avoid the channels used by competitors

42 Identifying major alternatives :
- Types of Intermediaries - Number of Intermediaries - Responsibilities of each channel member.

43 Types of Intermediaries :
- Company sales force : expand the company’s direct sales force. Assign outside sales people to territories and have them contact all prospects in the area or develop separate company sales force for different industries.

44 - Manufacturer’s agency :
Hire manufacturer’s agent- independent firms whose sales force handle related products from many companies.

45 - Industrial distributors :
Give them exclusive distribution, good margins, product training and promotional support.

46 : Number of Marketing Intermediaries :
Companies must also determine the number of channel members to use at each level. 3 strategies are available : - Intensive distribution - Exclusive distribution - Selective distribution

47 Intensive distribution :
Stocking the product in as many outlets as possible. These products must be available where and when consumers want them. E.g : tooth paste , candy etc.

48 Exclusive Distribution :
Giving a limited number of dealers the exclusive right to distribute the company’s products in their territories. E.g : automobiles, prestige women’s clothing. Exclusive distribution enhance the image of the product and allows for higher mark ups.

49 Selective distribution :
Between intensive and exclusive distribution lies selective distribution. E.g : TV, furniture, and small appliances brands.

50 Responsibilities of Channel Members :
The producer and intermediaries need to agree on the terms and responsibilities of each channel member. They should agree on : price policies, condition of sale, territorial rights, and specific services to be performed by each party.

51 Evaluating the major alternatives :
Suppose a company has identified several channel alternatives and wants to select the one that will best satisfy its long-run objectives. Each alternative should be evaluated against economic, control and adaptive criteria.

52 Economic Criteria : It estimates the sales of each channel would produce and the cost of selling different volumes through each channel.

53 Control issues : Using intermediaries means giving them some control over the marketing of the product. Some intermediaries take more control than others. Other things being equal, the company prefers to keep as much control as possible.

54 Adaptive criteria : Channels often involve long-term commitments to other firms, making it hard to adapt the channel to the changing marketing environment. The company wants to keep the channel as flexible as possible.

55 Retailing Retailing : All activities involved in selling goods or services directly to final consumers for their personal, non business use. Retailer : Business whose sales come primarily from retailing.

56 Types of retailers : 1. Amount of service : Self service retailers, limited service retailers. 2. Product line : Specialty store, Department store, Super market, Convenience store, Superstore, 3. Relative Prices : Discount store, Off-price Retailers, independent off- price retailer, factory outlet, warehouse club, category killer. 4. Retail organizations : Chain stores, Franchise.

57 Self service retailers :
(Eceran Swalayan ) Serve customers who are willing to perform their own “locate-compare-select” process to save money. Self-service is the basis of all discount operations and is typically used by sellers of convenience goods, such as super markets.

58 Limited –service retailers, such as JC Penney provide more sales assistance because they carry more shopping goods about which customers need information. Toko seperti ini juga menawarkan jasa : kredir, pengembalian barang. Karena itu biaya operasinya tinggi.

59 Specialty store ( toko khusus ):
A retail store that carries a narrow product line with a deep assortment within that line.E. G : Dapur Coklat,toko pakaian, toko peralatan olah raga, toko mebel, toko bunga

60 Department store ( toserba ) :
A retail organization that carries a wide variety of product line, typically clothing, home furnishings, and household goods. Each line is operated as a separate department managed by merchandisers E.g : Matahari, Metro

61 Super market : Large, low-cost, low-margin, high-volume, self service store that carries a wide variety of food , laundry, and household products.E.g : Hero.

62 Convenience store ( toko kelontong ) :
A small store, located near a residential area, that is open long hours, seven days a week, and carries a limited line of high- turnover convenience goods. E.g : Alfa Mart, Indo Mart,K Mart.

63 Super store : A store almost twice the size of a regular super market that carries a large assortment of routinely purchased food and non food items and offers services such as dry cleaning, post offices, photo finishing, check cashing bill paying, lunch counters, car care, pet care.E.G : Wal Mart Superstore, K Mart superstore, Giant, Hypermart, Carrefour.

64 Category killer : Giant specialty store that carries a very deep assortment of a particular line and is staffed by knowledgeables employess. E.G : Electronic City, AceHardware, Kawan lama.

65 Discount store : A retail institution that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume.E.G : Rp 5000,- Pemberian diskon sesekali tidak masuk dalam kategori ini.

66 Off-price retailer ( pengecer potongan harga ) :
Retailer that buys at less-than-regular wholesale prices and sells at less than retail ( membeli pada harga yang lebih rendah dari harga grosir dan menjual pada konsumen dengan harga yang lebih rendah dari pada harga eceran ): Matahari, Metro.

67 Independent off-price retailer :
either owned and run by enterpreneurs or is division of larger retail corporation. E.g : Kisson Harto di Matahari Dept store.

68 Factory outlet: Off-price retailing operation that is owned and operated by a manufacturer and that normally carries the manufacturer’s surplus, discontinued or irregular goods.

69 Warehouse club or wholesale club or membership warehouse :
Off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing and a hodgepodge of other goods at deep discount to members who pay annual membership fees. Such clubs make no home deliveries and accept no credit cards, but they offer rock- bottom prices. E.G : Sam’s Club, Costco, Makro ( ? )

70 Chain stores : Two or more outlets that are owned and controlled in common, have central buying and merchandising, and sell similar lines of merchandise.E.g : Hero, Alfa mart, Indo mart, etc.

71 Franchise : A contractual association between a manufacturer, wholesaler, or service organization ( a franchiser ) and independent business people ( franchisees ) who buy the right to own and operate one or more units in the franchise system. E.g : Mc Donald, Dunkin Donut, Es Teler 77,High Scope, TK Penabur.

72 Warehouse clubs took the country by storm in 1980s, but growth slowed considerably in the 1990s as a result of growing competition among warehouse store chains an effective reactions by supermarkets and discount stores.

73 Voluntary Chain ( jaringan suka rela): Terdiri dari suatu kelompok pengecer independen yg didukung oleh suatu pedagang besar, yang melakukan pembelian secara borongan dan menjualm barang dagangan yang sama.E.g : Independent Grocers Alliance.

74 Target Market and Positioning Decision :
Keputusan penting seorang pengecer adalah mengenai pasar sasaran ( = target market ): - pembeli tingkat atas ( Debenhams , menengah ( Matahari ) atau bawah ( Ramayana ).

75 Retailer Cooperative (Koperasi Pengecer):
Terdiri dari pengecer-pengecer in dependen yang membentuk suatu organisasi pembelian terpusat dan melakukan promosi bersama.Contoh : Associated Grocers, ACE.

76 Merchandising Conglomerate (Konglomerat perdagangan ) :
Perusahaan yang bentuknya bebas yang menggabungkan beberapa lini dan bentuk pengeceran dalam kepemilikan terpusat, yang juga menyatukan fungsi distribusi dan menajemen .

77 E.g : F.W Woolworth :selain toko-toko variasinya, juga mengoperasikan Kinney Shoe Stores,Afterthoughts ( toko khusus perhiasan pakaian dan tas tangan ), Herald Square Stationers, Frame Scene, dan Kids Mart.

78 Retailer Marketing Decision ( Keputusan pemasaran Pengecer )

79 Pengecer masa lalu : mempertahankan pelanggan dg cara : - lokasi yg dekat - jenis barang : khusus / unik - pelayanan yg baik - bisa kredit ( dg kartu kredit toko tsb )

80 Sekarang : Semua toko pengecer melakukan hal yang Sama. Akibatnya : toko-toko eceran dan pengecer semakin serupa satu sama lain.Carefour mirip sekali dengan Hypermart, mirip dengan Giant.

81 Karena itu : - banyak toserba membuka tokonya di pinggiran kota. - parkir luas. - obral - mengubah desain toko

82 Menghadapi persaingan dari toko super, pasar swalayan :
- membuka toko yang lebih luas - menjual barang lebih banyak n beragam - meningkatkan anggaran promosi - bergerak ke merek-merek pribadi utk mengurangi ketergantungan pd merek nasional dan meningkatkan laba.

83 Keputusan pemasaran yang dihadapi oleh
para pengecer adalah keputusan dalam hal : 1. Pasar sasaran ( target market ) 2. Ragam produk dan perolehan produk 3. Pelayanan dan lingkungan toko 4. Harga 5. Promosi 6. Tempat

84 Target Market Decision :
Retailers must define their target markets and then decide how they will position themselves in these markets. Should the store focus on upscale (Debenhams), midscale (Matahari ),or downscale( Ramayana ) shoppers.

85 Do target shoppers want variety (Super store ,Dept store ), depth assortment,
convenience, or low prices ?

86 Until they define and profile their target market , retailers can not make consistent decisions about product assortment, services, pricing, advertising, décor, to support their positions.

87 Too many retailers fail to define their target markets and positions clearly.
They try to have “something for everyone” and end up satisfying no market well. Successful retailers define their target markets well and position themselves strongly.

88 E.g : “The Limited” : was a store, targeted to young, fashion-conscious women. All aspects of the store were orchestrated to match the target consumer : clothing assortment, fixtures, music,colors, personnel.

89 A decade later his original customers were no longer in the “young group”.
To catch the new youngs, he started THE LIMITED EXPRESS. Case study : Hero.

90 Product Assortment and Services Decision:
1.The retailer’s product assortment should match target shoppers’ expectations. To differentiate itself from competitors a retailer can use any of several product- differentiation strategies. It can offer merchandise that no other competitors carries.

91 E.g : -THE LIMITED designs most of the clothes carried by its store. - Hero produced its own syrup, tissue roll, etc.

92 2.Retailers must decide on a services mix to offer customer: delivery, credit, conversation services that today’s super markets ignore. The services mix is one of the key tools of non price competition for setting one store apart from another.

93 3. The store atmosphere : Every store has a physical lay out that makes moving around in it either hard or easy. Each store has a feel : cluttered, charming, plush, somber. The store must have a planned atmosphere that suits the target market and moves customer to buy.

94 Increasingly, retailers are turning their stores into theaters that transport customers into unusual, exciting shopping environments. E. G : Mall of America : 500 specialty stores, a veritable playgrounds, ice skating rink, underwater water world featuring hundreds of marine specimens and a dolphin show, a two- storey miniature golf course, etc.

95 Price Decision : All retailers would like to charge high mark ups and achieve high volume, but the two seldom go together.

96 Most retailers seek either :
1. high mark ups on lower volume ( most specialty store ) or 2. Low mark ups on higher volume ( mass merchandisers and discount stores ).

97 Promotion decision : Retailers use the normal promotion tools : advertising, personal selling, sales promotion, public relations and direct marketing to reach consumers.

98 They advertise in magazines, newspapers, radio, TV.
Personal selling requires careful training of sales people in how to greet customers, meet their needs, and handle complaints. Sales promotion may include in –store demonstrations, displays, contests and visiting celebrities.

99 Public relations activities :
Press con and speeches, store openings, special events, newsletters, magazines, public service activities. Web sites offering customers information.

100 Place decision : Location is key to its ability to attract customers. The cost of building or leasing facilities have a major impact on the retailers profit.

101 Small retailers may have to settle for whatever locations they can find or afford.
Large retailers usually employ specialists who select locations using advanced methods. The undisputed winner in the “place race” has been Wal- Mart, whose strategy of being the first mass merchandiser to locate in small and rural markets was one of key factors in it phenomenal early success.

102 The Future of Retailing :
Consumer demographics, lifestyles and shopping patterns are changing rapidly, as are retailing technologies. To be successful, then, retailers will have to choose target segments carefully and position themselves strongly.

103 New Retail Forms and Shortening Retail Life Cycles :
New retail forms continue to emerge to meet new situations and consumer needs, but the life cycle of new retail forms is getting shorter.

104 Department stores took about 100 years to maturity
Department stores took about 100 years to maturity. More recent forms, such a warehouse stores reached maturity in about 10 years. Of top 10 discount retailers in 1962 ( the year that Wal-Mart and Kmart began ), not one still exist today.

105 - PRICE CLUB : the original warehouse chain.
launched in 1976 in San Diego as a retailing revolution, selling everything from tires to office supplies. - PRICE refused to expand beyond its California base. - As the industry quickly matures, PRICE ran headlong into wholesale clubs.

106 Only 17 years later, in a stunning reversal of fortune, a faltering PRICE sold out to competitor COSTCO. PRICE rapid rise and fall serves as a stark reminder to mass market retailers that past success means little in a fiercely competitive and rapidly changing industry. Thus, retailers can no longer sit back with a successful formula. To remain successful, they must keep adapting. ( E.G : Hero ).

107 Wheel of Retailing Concept :
A concept of retailing that states that new types of retailers usually begin as low margin, low price, low status operations, but later evolve into higher priced, higher service operations, eventually becoming like the conventional retailers they replaced.

108 Growth of non store retailing :
Mail order, television , phone, and on line shopping. This might remove some of the personal touch from the process, but it sure saves time. Although such advances may threaten some traditional retailers, they offer exciting opportunities for others.

109 Increasing intertype Competition :
- a consumer can buy CDs at specialty music stores, discount music stores, electronic super stores, general merchandise discount stores, video rental outlets, and through dozen of web sites.

110 They can buy books at stores ranging from independent local bookstores to discount stores , at super stores or web sites (Amazon). The competition between super stores and smaller, independently owned stores has become heated. Because of their bulk buying power and high sales volume, chains can buy at lower costs and thrive on smaller margins.

111 The Rise of Mega Retailers :
The rise of huge mass merchandisers and specialty super stores, the formation of vertical marketing systems have created super power mega retailers. Through their superior information systems and buying power are able to offer better merchandise selection, good service, and strong price savings tom consumers. As a result, they grow even larger by squeezing their smaller, weaker competitors.

112 Growing Importance of Retail Technology :
using computers to produce better forecast, control inventory costs, order electronically from suppliers, send e mail between stores, in- store TV, etc.

113 Global Expansion of Major Retailers :
retailers with unique formats and strong brand positioning are increasingly moving into other countries to escape mature and saturated home markets. E.G : Mc Donald’s, Hypermarts, Giant, Carefour.

114 Retail Stores as “Communities” or “Hang outs “ :
Cafes, tea shops, juice bars.

115 Wholesaling ( Perdagangan besar / Grosir / Distributor)

116 Perdagangan besar meliputi semua kegiatan yang terlibat dalam penjualan barang atau jasa pada orang-orang yang membelinya untuk dijual kembali atau untuk penggunaan bisnis.

117 Wholesaler : a firm engaged primarily in wholesaling activity.

118 Beda antara pedagang besar dan pengecer :
1. Pedagang besar kurang memperhatikan promosi, suasana, dan lokasi karena mereka bertransaksi dengan pelanggan bisnis, bukan dengan konsumen akhir. 2. Transaksi pedagang besar lebih besar dari transaksi eceran. 3. Pedagang besar biasanya meliputi daerah per dagangan yang lebih luas dari pengecer.

119 Mengapa perlu menggunakan pedagang besar
Mengapa perlu menggunakan pedagang besar ? Bukankah produsen dapat melewati pedagang besar dan menjual barangnya langsung kepada pengecer atau konsumen akhir ? Secara umum, pedagang besar digunakan jika mereka lebih efisien dalam melaksanakan salah satu atau beberapa fungsi berikut :

120 Penjualan dan promosi : PB memiliki wiraniaga yang membantu produsen mencapai banyak pelanggan bisnis dengan biaya relatif rendah . Pembelian dan penyediaan ragam produk : PB dapat memilih jenis barang dan menyediakan ragam produk yang dibutuhkan pelanggan, jadi sangat mengurangi tugas pelanggan.

121 3.Memecah ukuran besar : PB membeli dalam ukuran besar dan memecah menjadi unit-unit yang lebih kecil. 4. Pergudangan : PB menyimpan persediaan, sehingga mengurangi risiko dan biaya persediaan pemasok maupun pelanggan.

122 5. Pengangkutan :PB sering dapat melakukan pengiriman lebih cepat pada pembeli karena mereka lebih dekat pada pembeli dibandingkan dengan produsen. 6. PB membiayai pelanggan mereka dengan memberikan kredit, dan membiayai pemasok dengan memesan lebih awal dan membayar tagihan tepat waktu.

123 7. Menanggung Risiko : PB menanggung sebagian risiko dengan memegang hak atas barang dan menanggung risiko atas kecurian, kerusakan dan keusangan. 8. Informasi pasar : PB memberi info bagi pemasok dan pelanggan mereka berkaitan dengan kegiatan pesaing, produk baru, perkembangan harga, dsb.

124 9. Jasa Manajemen dan Konsultasi :
PB sering membantu pengecer meningkatkan usaha pengecer dengan memberikan pelatihan pramuniaga, membantu mengatur tata letak dan pajangan toko, menyusun sistem akuntansi dan pengendalian persediaan.

125 Bebarapa Jenis Padagang besar :
1. Pedagang Besar Niaga ( Merchant Wholesaler ) : Bisnis yang yang dimiliki secara independen yang mengambil hak atas atas barang dagangan yang ditangani. Juga disebut pemborong ( jobbers ), distributor atau mill supply houses.

126 2.Pedagang Besar Pelayanan Penuh ( Full service Wholesaler ): Memberikan pelayanan sepenuhnya : menyimpan persediaan, memiliki wiraniaga,memberikan kredit, melakukan pengiriman, bantuan menajemen.

127 3.Pedagang Grosir ( Wholesale Merchant ) :
Terutama menjual kepada pengecer. 4.Distributor Industri : Menjual ke produsen, bukan ke pengecer. 5.Koperasi Produsen : Dimiliki oleh para petani anggota koperasi dan mebgumpulkan hasil pertanian untuk dijual ke pasar lokal. Laba koperasi dibagikan pada para anggota pada akhir tahun.

128 6. Pialang ( broker ): Tidak memiliki hak atas barang
6. Pialang ( broker ): Tidak memiliki hak atas barang. Fungsinya mempertemukan pembeli dan penjual, membantu dalam negosiasi.Tidak menyimpan persediaan, tidak melakukan pembiayaan, tidak menanggung risiko. Dibayar oleh pihak yang menyewanya. Contoh : Ray White.

129 7. Agen : tidak memiliki hak atas barang
7. Agen : tidak memiliki hak atas barang. Mewakili pembeli atau penjual secara lebih permanen dari pada pialang. Ada agen produsen, agen penjualan, agen pembelian.