Distribution Management - Summary

Distribution Management Spring/Summer 2019
TABLE OF CONTENTS
I. INTRODUCTION
II. DISTRIBUTION CHANNEL SYSTEM
 Concepts
 Channel participants
III. DEVELOPING THE DISTRIB.

CHANNEL
 Distribution Channel Strategy
 Channel Design
 Target Market
 Digital Distribution Channel
IV. MANAGING THE DISTRIB. CHANNEL

 Motivating the Channel Members
 Product & Channel Management
 Pricing issues in Channel Management
 Promotion & Channel Management
 Service & Channel Management
 Use of data in Channel Management
V. SALES MANAGEMENT
VI. ADDITIONAL ASPECTS OF DISTRIB.

MNGT
 Supply Chain Management
 Logistics & Channel Management
case
VII.
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Distribution Management: course

summary
I. Introduction
Content:
The course contains 5 main parts:
1. Distribution Channel Systems, talking about the concepts and
participants in channels
2. Development of the distribution channel, covering the distribution
channel strategy, its design, targeted market et digital aspect.
3. Managing the distribution channel, talking about the motivation of
members, product, service, pricing and promotion channel
management, as well as the use of data in channel management.
4. Sales Management with the art of selling , operational sales
management and salesforce management
5. Additional aspects of distribution management, covering distribution
and supply chain logistics, as well as logistics management.
Definition:
Distribution Management is the management of the efficient transfer of
goods from the place where they are manufactured, to the place where
they are sold or used. Distribution Mngt also involves warehousing,
materials handling, packaging, stock control, order processing and
transport.
Distribution includes:
- To decide and implement the right strategy
- Th have the right partner, products & services
- At the right price, right time and right place
The perfect example with all the ingredients of a successful distribution

that is different than others is NESPRESSO.
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II. Distribution Channel Systems

Concepts:
The growing importance of distribution channels

Where does this importance come from?
- The exposition of information technology and e-commerce
- A greater difficulty in gaining a sustainable competitive advantage
- The growing power of distributors, especially retailers in marketing
channels
- The pressure to reduce costs
The advantages of focusing on a better channel strategy:

- Creates competitive advantage with LT viability
- Builds strong relationships between manufacturers and channel
members
- Based on trust, confidence and people power
How distribution channels relate to the marketing mix

What are the key challenges of the marketing mix?
Marketing Mix, 4 Ps Challenges

PRODUCT Limited ability to gain and hold
competitive advantage
PRICE Price wars erode profitability &
provide unstable basis for
sustaining competitive advantage
PROMOTION Expensive and short-lived
PLACE Distribution channels support &
enhance other Ps to meet demands
of target markets
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The flows in the distribution channels
Relationship between
Channel Strategy Logistics
Management
Both part of distribution variable
Concerned with the entire Focused specifically on

process of starting and operating providing product availability
contractual organization. It is at appropriate time & place
5formulated
types of before
Distribution***
logistics
management.
****
Product Flow
Manufacturers  Transportation Cny  Wholesalers  Retailers 
Consumers
Negotiation Flow
Manufacturer  Wholesalers  Retailers  Consumers
Information flow
Manufacturers  Transportation Cny  Wholesalers  Retailers 

Consumers
The channel participants:
What are the motivations of shifting task to intermediaries?

Producers & manufacturers: Lack of expertise, of economies of scale,
of local knowledge, country access of resources.
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Intermediaries: spread large fixed costs over large quantities of diverse

products, achieve economies of scope and scale.
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III. Developing the Distribution

Channel
Distribution Channel Strategy:
“The broad principles by which the firm expects to achieve its distribution
objectives for its target markets”.
The role of distribution in the firm’s overall objectives & strategies

 the higher the priority given to distribution, the higher the level at which
it should be considered in formulating the organization’s overall objectives
and strategies.
 Distribution does increasingly warrant the attention of top
management, because competition has made the issue of distribution too
important for top management to ignore.
The role of distribution in the marketing mix: PLACE
The 4 most important factors to make Strategic Distribution decisions are:

- Target Market Demand: firms should stress distribution when it
serves customers’ needs in the target market. Marketing channels
are so closely linked to customer need satisfaction, because it is
through distribution that firms can provide the kinds and levels of
service that make for satisfied customers.
- Competitive Parity: distribution advantages are not easily copied by
competitors. Distribution advantages are based on a combination of
superior strategy, organization and human capabilities.
- Distribution Neglect: competitors’ neglect of distribution strategies
provides excellent opportunities. The channel manager must analyze
target markets to determine whether competitors have neglected
distribution and whether vulnerabilities exist that can be exploited.
- Distribution and Synergy: hooking up with a mix of cooperative
channel members will strengthen the channel. Because each
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channel member is an independent entity, rewarding opportunities

exist for channel managers to cultivate cooperation among
members.
Finding the right distribution partners: viewing the relationship with

channel members as a partnership of strategic alliance can offer
recognizable benefits to the manufacturer & channel members on a LT
basis. BUT because customers perceive channel members as an extension
of the manufacturer’s own organization, members should:
- Reflect channel strategies the firm has developed to achieve its
distribution objectives
- Be consistent with the firm’s broader marketing objectives &
strategies
- Reflect the objectives & strategies of the organization as a whole
Channel design:
Definition of channel design:
Decisions involving the development of new marketing channels either
where none had previously existed or where existing channels can be
modified.
Distinguishing points of the definition include:

 A decision made by the marketer
 The creation of modification of channels
 The active allocation of distribution tasks in an attempt to develop
an efficient structure
 The selection of channel members
 A strategic tool for gaining a differential advantage
Who engages in channel design?
Firms:  Look down the channel toward the

 Producers market
 Manufacture
rs
 Service
providers
 Franchisors
Wholesalers  Look both up and down the channel
Retailers  Look up the channel to secure

suppliers
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Channel design roadmap:
The concept:
1. Recognize the needs for channel design decisions:
 Developing a new product or product line
 Aiming an existing product at a new market
 Making a major change in some other component of the
marketing mix
 Establishing a new firm
 Adapting to changing intermediary policies that may inhibit
attainment of distribution objectives
 Dealing with changes in availability of particular kinds of
intermediaries
 Opening up new geographic marketing areas
 Facing the occurrence of major environmental changes
 Meeting the challenge of conflicting or other behavioural
problems
 Reviewing and evaluating
2. Set & coordinate distribution objectives:

Setting distribution objectives requires knowledge of which, if any,
existing objectives and strategies may impinge on these distribution
objectives. There’s a need for congruency of the objectives.
3. Specify
distribution tasks:
Outlining distribution tasks is specific and situationally dependent on
the firm. For example, distribution tasks for a manufacturer of
consumer products differs from those for products sold in industrial
markets.  Distribution tasks are a function of the distribution
objectives and the types of firms involved.
4. Channel structure dimensions:

 Number of levels in the channel: It usually range from 2 to 5
or more. The number of alternatives is limited to 2 or 3 choices.
These limitations result from the following factors:
o Particular industry practices
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o Nature & size of the market

o Availability of intermediaries
 Intensity at the various levels: This relates to the relationship

between the intensity of distribution dimension and the number
of retail intermediaries used in a given market area.
o The intensity dimension can be intensive / selective /
exclusive
o The numbers of retail intermediaries can be many / few
/ one
 Types of intermediaries at each level: There are numerous

types of possible intermediaries. The manager should emphasize
the different types of distribution tasks performed by these
intermediaries. There are new types of intermediaries arising
such as:
o Electronic online auction firms (e.g. eBay)
o Industrial products sold in B2B markets (e.g. Converge, see
slide 27-31 for more information about Converge but I think
we don’t give a fuck)
5. Variables affecting channel structure: There are different
categories of variables:
 Market variables
o Market geography: Location, geographical size, distance
from supplier…
o Market size: Number of customers in a market
o Market density: Number of buying units (consumers or
industrial firms) per unit of land area
o Market behaviour: Who buys, how, when and where
 Product variables:
o Bulk & weight
o Perishability
o Unit value
o Degree of standardization
o Technical versus nontechnical
o Newness
 Company variables
o Size: The range of options is relative to a firm’s size
o Financial capacity: The greater the capital, the lower the
dependence on intermediaries
o Managerial expertise: Intermediaries are necessary
when managerial experience is lacking
o Objectives & strategies: Marketing & objectives may
limit use of intermediaries
 Intermediary variables
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o Availability: Availability of intermediaries influences

channel structure
o Cost: Cost is always a consideration in channel structure
o Services: Services that intermediaries offer are closely
related to the selection of channel members
 Macro-environmental variables: The impact of the macro-

environmental forces (PESTEL) is a common reason for making
channel design decisions.
o Political
o Economical
o Social
o Technological
o Environmental
o Legal
 Behavioural variables
o Develop congruent roles for channel members
o Be aware of available power bases
o Attend to the influence of behavioural problems that can
distort communications
6. Choose the best channel structure: Choosing an optimal channel
structure is not possible because:
 Management is incapable of knowing all possible alternatives
 Precise methods for calculating the exact payoffs associated with
each alternative’s structures do not exist
But simulation & forecast techniques are improving quickly.
7.  Selection of channel members
Target Market:
/!\ The target market’s needs and wants should drive the manner in
which the channel manager shapes the design of the firm’s marketing
channels.
Framework for market analysis
1. Market geography: refers to the geographical extent of markets and

where they are located.  The channel manager’s task is to evaluate
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market geography relative to channel structure to ensure that the

structure is able to serve the markets effectively and efficiently.
2. Market size: refers to the number of buyers or potential buyers

(consumer or industrial) in a given market.  The channel manager’s
task is to consider the peculiarities of particular situations and other
relevant variables.
3. Market behaviour: consists of 4 sub-dimensions:

 When: the market buys: seasonally / weekly / daily?
 Where: the market buys: types and locations of outlets
 How: the market buys: quantities, self-service, one-stop
shopping, impulse buying, home-shopping
 Who: buys: who makes/decides the physical purchase?
4. Market density: refers to the number of buyers or potential buyers

per unit of geographical area. Markets can promote efficiency in the
performance of several basic distribution tasks such as:
 Transportation
 Storage
 Communication
 Negotiation
Digital Distribution Channels

A distribution channel refers to the path through which goods and
services travel to get from the place of production or manufacture to the
final users. It has its center marketing and logistical considerations.
 B2B distribution
 B2C distribution
Nowadays, more and more operations are digitalized.
A mono-channel distribution, no matter if digitalized or not, gives the

customer only one single possibility to purchase the goods and services.
Raising needs and possibilities in customer communication, segmentation,
decentralized demand and technology are pushing companies to use more
and more variety of channels.
3 Levels of intensity:
- Multi-channel (various but independent)
- Cross-channel (various but integrated)
- Omni-channel (completely integrated)
Many retailers are multichannel, they sell their products across more
than one channel. The key difference is how the customer experience is
joined up across those channels.
Ex: an omni-channel retailer joins touch points together so that whatever
journey the customer chooses to take the experience is consistent and
unified.
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The biggest barrier to implementing omni-channel are cost and complexity

(significant investments in tech and business change).
- E-commerce: commercial transactions conducted electronically on

internet
- E-business: business of buying and selling goods and services on
internet
- M-business: mobile support of business transactions regarding the
search, negotiation and delivery of products or services.
- S-business: emerging from social media marketing (SMM), a form
of internet marketing that utilizes social networking websites to
produce content that users will share with their social network to
help a company increase brand awareness.
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IV. Managing the Distribution

Channel
Motivating the Channel Members
Channel Management: the
administration of existing channels to
secure the cooperation of channel
members in achieving the firm’s
distribution objectives.
VS
Motivation Management: the actions

taken by the manufacturers to foster
channel member cooperation in
implementing the manufacturer’s
distribution objectives.
Channel Management = a company’s activities in organizing its

different distribution channels and selling effectively through them.
Effective channel management requires that the channel manager be

aware of how channel management interfaces with product, price,
promotion, and logistics in the marketing channel.
Channel management involves more than just motivation management;

the channel manager must also be skilled at using the element of the
marketing mix to facilitate the administration of the channel. The channel
manager needs to use the firm’s product, pricing, promotion, and logistics
variables to their maximum effect in securing cooperation from channel
members. These marketing mix variables may be viewed as resources:
how these resources are used will affect the performance of the channel
members.
Basic framework:
1. Find out the needs and problems of channel members
2. Offer support to the channel members that is consistent with their
needs and problems
3. Provide leadership through the effective use of power
Leadership in the channels:

The channel manager must exercise effective leadership on a continuing
basis to attain a well-motivated team.
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Channel member needs & problem:
1. Research studies of channel members  less than 1% of

manufacturers research budget is spent on channel member
research
2. Research studies by outside parties
Provide a higher assurance of objectivity
Provide a level of expertise that manufacturer may not possess
3. Marketing channel audits: focus of channel manager’s approach
-Gather data, how channel members perceive the
manufacturer’s marketing program
-Locate the strengths and weaknesses in the
relationships
-How make the relationship viable and optimal
 What makes marketing channel audits most effective?

- It should identify and define in detail the issues relevant to the
manufacturer/ wholesaler and/or retailer relationship. Also, issues
chosen for the audit should be cross-referenced to any relevant
variables. Finally, it must be conducted periodically so as to capture
trends and patterns.
4. Distributor advisory councils

Involve: the top management representatives from the
manufacturer and from the channel members
The benefits?
o Recognition for the channel members
o Provide vehicle for identifying and discussing mutual needs
and problems
o Results in an overall improvement of channel communications
Product and Channel Management

Strategic Product Management
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Successful product strategies depend on:

- Product quality, innovativeness or tech sophistication
- Capabilities of managers overseeing product line
- Firm’s financial capacity & willingness to provide promotional
support
- Channel member’s role in implementing product strategies
Types of strategic product strategies:
1. Product Differentiation: Creating a differential product involves

getting consumers to perceive a difference. Implication for channel
management:
- Select & help develop members who fit the product differentiation
strategy
- Provide retailers with the kind of support needed to properly present
the product when this strategy is influenced by how the product is
sold in retail
Ex: safety – an airline has a better reputation for safety than its
competitors.
2. Product Positioning: The manufacturer’s attempt to have

consumers perceive the product in a particular way relative to
competitive products. Implication for channel management:
- Possible interfaces between the product positioning strategy and
where the product will be displayed and sold to consumers should be
considered before the strategy is implemented
- Elicit retailer support before attempting to implements a strategy
- Maintain backup supply of retailer incentives
Ex: Image a line of running shoes promoted by a popular athlete
3. Product line extension & contraction: Manufacturers often

engage in both expansion and contraction simultaneously.
Implication for channel management:
- Difficult to balance channel members satisfaction & support for
reshaped product lines
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-Channel members are making increasing demands on

manufacturers to have the rights mix of products
Ex: The strategy for an extension could be a different color or size, and it
may have different ingredients or come in different flavor
4.Trading up & trading down: Adding lower-prices products or

product lines, or higher prices products to a product line.
Implication:
- Whether existing channel members provide adequate coverage of
high-end of low-end market segments to which trade-up or trade-
down product is aimed.
- Whether the channel members have confidence in the
manufacturer’s ability to successfully market the trade-up or trade-
down product.
Ex: add features to a product  more portrait iPhone
5. Product Brand strategy: When manufacturers sell under both

national and private brands, direct competition with channel
members may result. Implication:
- Do not sell both national & private brand versions of products to the
same channel members
- Sell national and private brand versions in different geographical
territories
- Physically vary products enough to minimize direct competition
Ex: Coca Cola
6. Product service strategy: It is the role of the marketing channel

to provide necessary service along with the product to the final user.
Manufacturers should provide after-sale service:
- By offering it directly at the factory
- Through their own network of service centers
- Through authorized independent service centers
- Through channel members
- By some combination of the above
Pricing Issues in Channel Management

Importance of pricing: pricing decisions cause top-level marketing
executives more concern than any other strategic marketing decision area
 pricing is viewed as having a more direct link to the firm’s bottom line.
- Anatomy of channel pricing structure: channel participants each
want a part of the total price sufficient to cover their costs and
provide a desired level of profit.
- The “golden rule” of channel pricing: it is not enough to base pricing
decisions solely on the market, internal cost considerations and
competitive factors. Rather, for the firms using independent channel
members, explicit consideration of how pricing decisions affect
channel member behavior is an important part of pricing strategy.
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 Pricing decisions can have a substantial impact on channel member

performance.
The major challenge for the channel manager is to help foster pricing
strategies that promote channel member cooperation and minimize
conflict. Other channel member role regarding pricing:
- Find out about channel member views and appraise their effects on
channel member perf.
- Have channel members’ viewpoints on pricing issues included as an
integral part of the manufacturer’s price-making process
- Such action anticipates and hopefully avoids problems that may
arise after pricing decisions have taken effect.
Why do channel pricing guideline exist?

- To help those involved in pricing decisions to focus more clearly on
the channel implications of their pricing decisions.
- To provide general prescriptions on how to formulate pricing
strategies that will help promote channel member cooperation and
minimize conflict.
What are the channel pricing guidelines?

1. Profit margins: each efficient reseller must obtain unit profit margins
in excess of unit operating costs.
2. Different classes of resellers: each class of reseller margins should
vary in rough proportion to the cost of the functions the reseller
performs.
3. Rival brands: at all points in the vertical chain, prices charged must
be in line with those charged for comparable rival brands.
4. Special arrangements: special distribution arrangement – variations
in functions performed or departures from the usual flow of
merchandise – should be accompanied by corresponding variations
in financial arrangements.
5. Conventional norms in margins: margins allowed to any type of
reseller must conform to the conventional percentage norms unless
a very strong case can be made for departing form the norms.
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6. Margin variation on models: variations in margins on individual

models and styles of a line are permissible and expected. However,
they must vary around the conventional margin for the trade.
7. Price points: a price structure should contain offerings at the chief
price points, where such price exist.
8. Product variation: a manufacturer’s price structure must reflect
variations in the attractiveness of individual product offerings.
BUT  There is no guarantee! Particular circumstances and situations

exist I which these guidelines will not/only partially apply or will be
irrelevant.
Other issues exist, such as:

- Exercising control in channel pricing
- Changing price policies: changes in manufacturer pricing policies or
related terms of sale cause reactions among channel members 
they fear such changes because they have become accustomed to
the strategy/adapted their own price strategy to them.
- Passing price increases through the channel: many strategies exist
for channel members to use in order to avoid simply passing along
price increases though the channel.
- Using price incentives in the channel: manufacturers face difficulties
gaining strong retailer acceptance and follow-through on pricing
promotions. Pricing solutions should be simple, straightforward and
at least as attractive to retailers as they are to consumers.
- Gray market & free riding:
o Gray market: the sale of brand-name products at very low
prices by unauthorized distributors or dealers.
o Free riding: describes the behavior of distributors & dealers
who offer extremely low prices but little service to customers.
 Channel design decisions that result in closely controlled channels
and selective distribution as well as hanging buyer preferences may
help limit the growth of the gray market and free riding.
Promotion and channel management:
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Pull Strategy: manufacturer builds strong consumer demand for a product

to force members to automatically promote the manufacturer’s product
because it is in their obvious self-interest
to do so.
Push strategy: manufacturer develops mutual effort & cooperation in the

development and implementation for promotional strategies by working
directly with members to develop strong & viable promotional support.
Studies show that frequent push promotions do not foster high levels of
channel member support on a consistent basis. They should be viewed as
part of strategic channel management rather than as mere tactical actions
to elicit quick channel member responses to sell more products.
*sequence flows:
1. Promotion flow
2. Negotiation flow
3. product flow
Basic push promotional strategies:

1. Cooperative advertising: a sharing in the cost on a 50/50 basis up
to some percentage of the retailer’s purchases from the
manufacturer.
Administration:
 Effective administration by the manufacturer is necessary to avoid
abuses and to help secure cooperation from the channel members.
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
Channel manager must be sensitive to channel members’ primary
concern about this strategy
Examples:
1) Dove’s “Campaign for Real Beauty” was a cooperative advertising
with Walmart. The products presented in the campaign were
available at Walmart.
2) Intel and HP are also doing co-op advertising with the “Intel Inside”
campaign that promotes two different products at the same time
(the HP computers and the Intel processors).
2. Promotional allowances: manufacturer offers channel member a

direct cash payment or a certain percentage of the purchases on
particular products.
Administration: Manufacturer should conduct research to determine
whether it is getting its money’s worth in terms of retailer cooperation and
follow-through.
3. Slotting fees: payments by manufacturers to persuade channel

members, especially retailers, to stock, display and support new
products.
Administration: Joint sponsorship of research between retailers and
manufacturers on effects of slotting fees on various topics could help
alleviate conflict.
4. Display & selling aids: include point-of-purchase displays, dealer

identification signs, promotional kits, special in-store displays and
mailing pieces.
Administration: Channel manager should make the effort to see whether
the firm’s selling aids and displays are serving any useful purpose.
 Manufacturers often have difficulties in getting retailers to make use of
these material because they are usually flooded with such promotional
material. It is thus often thrown away and never opened.
5. In-store promotions: ST events designed to create added interest

and excitement for the manufacturer’s product.
Administration: The key issue for the channel manager is whether the
retailers perceive benefits from it. Thus, the planning of a successful in-
store promotion should always include considerations of the potential
benefits for the retailers involved.
6. Contests & incentives: techniques that manufacturers use to

stimulate channel member sales efforts for their products Using
significant events such as the Olympics can enhance the meaning
and excitement of the contests and incentives for channel members’
sales people.
Administration: Manufacturer should put much effort into determining the
view of channel members toward this form of promotion.
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7. Promotional deals & merchandising campaigns: included a

variety of push-type promotional deals such as
 Discounts to channel members to encourage them to order more
products
 Favorable offers to consumers to foster larger purchases (buy one,
get one free)
 Percentage or cents-off offers
 Rebates, coupons, prizes, premium offers
 It might overlap one or more of the strategies presented before.
Administration: Manufacturers need to develop carefully planned
strategies that are based on knowledge of channel member needs and
that take a long-term perspective on promotion through the marketing
channel.
Kinder & gentler push promotion :
1. Training Programs
Definition: Aim at improving the performance of channel members’ sales
people. Help wholesalers’/retailers’ knowledge, selling techniques and skill
in counseling customers they call on.
Pros Cons
Manufacturers can assist There is often (perceived) little
wholesalers & retailers by helping time for training.
to offset the cost.
Can demonstrate in a highly visible
way the manufacturer’s
commitment to helping channel
members.
2. Quota Specification
Definition: Sales volumes that manufacturers specify for channel
members to generate during a certain time period. It is viewed as a
promotional strategy because quotas are set in the belief that they will
incentivize channel members to greater effort in return for rewards offered
for reaching or exceeding the quotas.
Pros Cons
Can amount to a substantial sum If presented in a coercive fashion,
and can make a major difference in it can produce ill will and conflict
the dealers’ overall profit picture. rather than support.
Can be effective in improving Channel members may ignore
channel member promotional quota if manufacturer’s line does
support. not make up an important part of
the member’s product mix.
3. Missionary Selling
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Definition: Manufacturer’s salespeople who are specially assigned to

supplement the selling activities of channel members. In the consumer
goods industry, they can be called upon to do any of the following
activities:
 Check wholesale and retail inventory levels
 Calling on retailers to inform them of new products
 Helping arrange in-store displays
 Answering wholesalers and retailers’ questions
Pros Cons
Useful when channel members lack Expensive.
sales capacity or competence to
handle tasks assigned to them.
Useful when channel members Can cause conflicts in the channel.
desire this service.
Some members view these
salespeople as intruding on the
time of their own sales force.
4. Trade shows
Definition: Annual events organized by associations in particular
industries, often worldwide. The main objective is to attain the maximum
impact and to gain the widest recognition for the firm’s products and thus
to enhance the firm’s recognition and respect among its relevant publics.
Pros Cons
Opportunity for manufacturers to Very expensive.
sell existing & new channel
members substantial quantities of
new products face-to-face.
A chance for manufacturers to Needs a lot of resources and
socialize with channel members. preparation time.
Creates a sense of pride and
belonging in channel members that
sell its products.
Service and Channel Management:

Service differentiators:
1. Ordering ease
Definition: It refers to how easy it is for customers to place an order with
the company.
Goal: The goal for a company is to keep the ordering process as quick and
easy as possible and in as few steps as possible. Companies that need
multiple steps for their ordering often frustrate customers.
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 This is a reason why e-commerce is on the rise. It is a good opportunity

for companies to make an easy online ordering process.
Example: In restaurants, we can sometimes order and pay online and

then just go and pick-up the food at the restaurant without having to wait
in the line.
2. Delivery
Definition: The delivery conditions can be turned into a marketing
advantage by companies.
Goal: No matter which products or services a company is delivering, it

should be fast and accurate. It is important to incorporate delivery time
and conditions in the marketing campaign as it is a good mean of
differentiation.
Example: Amazon Prime has a delivery time of 24 to 48 hours, which is

way better than traditional e-commerce companies (4-6 days usually).
3. Installation
Definition: Installation of an equipment or product can be provided at
different conditions and it is a differentiator for companies.
Example: Companies which sell air conditioners or technical equipment

like cold rooms have to differentiate themselves through their services,
including installation.
4. Customer training
Definition: Offering employee training to your customers might be a
differentiator, especially with new products in a market.
 If the customer doesn’t understand how to use your product, he will
blame you rather than himself so customer training is important.
Example: When you buy a washing machine, you can have a demo in
order to be sure that you will use it correctly.
5. Customer consulting
Definition: It includes numerous infrastructures or operation related
consulting which can be offered in the form of data management,
information systems and service advisory.
Example: Product managers of FMCG (Biens de grande consommation)

companies consult their distributors and help them to increase their
business.
6. Maintenance and repair

Repair services need to differentiate themselves with the response time
and quality of work.
Example: Dell or IBM have onsite engineers who take care of all
customers’ needs.
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7. Returns
There are two types of returns:
1) Controllable returns: When there is a genuine problem with the
product or it got broken in transport.  If you have too much of it,
you know you can change something
2) Uncontrollable returns: When the customer did not understand the
product or had a bad experience with it.  As long as it is a small
portion, you are good.
 A solution is to open experience centers that allow customers to try the
product before purchase.
8. Guarantees
Pas d’explication, assez obvious.
The use of data in Channel Management:

Advantages Disadvantages
Global scope & reach Lack of contact with actual
products & delayed possession
Convenience/rapid transaction Fulfillment logistics not at internet
processing speed
Information processing efficiency & Clutter (désordre), confusion &
flexibility cumbersomeness of internet
Data-based management & Non-purchase motives for shopping
relationship capabilities not addressed
Lower sales & distribution costs Security concerns of customers
Implications of Electronic Marketing Channels:
1. Objectives & Strategies of the firm
The role of distribution is more complex because of electronic marketing

channels.
 Channel manager must consider whether internet-based channels
fundamentally affect the firm’s decision about the priority given to
distribution.
2. The Marketing Mix
The internet arms large numbers of customers with more information

about products and services to level the playing field.
 The fourth P (place), may assume a larger role relative to the other
three for more and more firms.
3. Channel Design
25
The channel manager of retailers, industrial and b2b markets should

provide “channel-surfing” consumers with whatever channels
combinations of channels they desire.
 A facet of the development of an effective multichannel marketing
strategy.
4. Channel Member Selection
Complexity grows as channel member selection may include the need to

avoid conflict with conventional channel members.
 The need to select members carefully
5. Channel Management
Multichannel challenge of conventional and electronic channels.

 The fundamental issues of motivating channel members, building
cooperation, managing conflict and coordinating elements of the
marketing mix requires manager’s full attention.
6. Evaluation
Likely to change  Specific criteria for performing evaluations &

technological means for doing so.
Unlikely to change  Performance expectations, criteria and measurement

of how well they are being met by channel members.
V. Sales Management
Why salespeople had a negative reputation in the past:
 Focused on moving product rather than understanding the needs of
the customer
 Unequal balance of power  They had more information than their
customer
 Because of the two items above, there was often a sense of
manipulation
The old ABC of selling: Always Be Closing  Make the deal, no matter
what it takes.
The new ABC of selling:
 A is for Attunement
o Be attuned to your customers’ needs and motivations
o Listen to your customers rather than talking at them
 B is for Buoyancy
o In sales, you will encounter rejection more than success
o Reman buoyant (optimistic) by understanding why some sales
work out while others don’t
26
/!\
Inbound sales: The customers come to you (high-volume, low-cost

products)
Outbound sales: You go to the customers (high-cost products)
 C is for Clarity
o Clarify who you are selling to and it will become much easier
to refine your sales approach.
B2B B2C
Selling to organizations Selling to individuals
Outbound sales Inbound sales
Goal: Secure bulk orders from a Goal: Attract large number of
few large clients individual customers
Operational Sales Management
Distribution and Sales Management:

 Sales involves delivery and transfer of ownership of the product or
service to the customer
 It forms the beginning of the latter part of the supply chain post
manufacture
 Sales constitutes the direct and most intimate contact of the firm
makes with its customers
 Sales is responsible for the fulfillment of the promise made to the
customer by its predecessor function- marketing
 While marketing is responsible for creation of a customer, sales and
after sales service are responsible for servicing and retention of the
customers
27
Responsibilities of Sales Management:

 Forecasting of aggregate and product wise sales, using past data
and incorporating current and future trends
 Designing and managing the sales workforce to meet the forecast
and build long term relations with associates
 Decide on critical aspects of sales policy including pricing, credit
terms to customers and settlement of claims
 To closely liaise with After Sales service to present a united
customer care front to associates and consumers
Designing a Sales Force: Managing the Sales

Force:
Tasks of
Sales Representatives: Steps in an effective
selling process
 Prospecting / Qualifying
 Preapproach
 Approach
 Presentation
 Overcoming objections
 Negotiating & Closing
 Follow-up
Sales Force Management

Three Major Determinants of Motivation:
1. Environmental conditions
2. The firm’s management policies (compensation, supervision, task
characteristics)
28
3. Personal characteristics of the salesperson
The Expectancy-Value Model

 Why are people motivated?
 To initiate a task
 To choose a certain effort level
 To persist in a task
 Expectancy Principle: salespeople chose a level of effort based on
the expected payoffs of alternative effort levels.
 Most popular model of motivation (at least among the sales force
researchers).
 Valence/Value: Vj
 Valence is a composite of the utility you derive from the sub-
outcomes (consequences) that accompany achieving level j of
performance.
These might include:

 More pay, promotion, liking & respect, lack of leisure time,
personal growth
 security, sense of accomplishment, recognition, hurting personal
life
 Outcomes can have negative utility/valence
 Obviously, the list could be longer & vary across individuals
Implications for How to Motivate

 No reward is motivating if it is out of reach (low expectancy)
 Raising the goal (performance level j) often depresses motivation:
 Introduces negative outcomes
 Depresses expectancies
 Can motivate by trying to induce sales people to:

 raise expectancy (I.e. through training, encouragement)
 consider a negative sub-outcome unlikely
 consider a positive sub-outcome likely
29
 Add a new positive sub-outcome

 Change their ideas about whether sub-outcomes are desirable or
undesirable (vi: doomed strategy for the most part)

Motivators
Positive Motivators
 Commission
 Recognition
 Acceptance Negative Motivators
 Respect  Fear
 Trust  Intimidation
 Achievement  Revenge
 Pride  Obligation
 Social Comparison (one-up)
Sales Manager Objectives & Tools

Objectives:
 Increase magnitude and accuracy of expectancies
 Increase accuracy of instrumentalities
 Understand and work with valences
Key: Reduce role stress arising from role ambiguity & role conflict
Tools:
 training: expectancies
 evaluations, reviews: expectancies, instrumentalities
 communication, participation: instrumentalities
 selection: hire SP whose Vi’s match company suboutcomes
How to Motivate
 Define each employee’s motivating factors and provide an
environment that incorporates those factors
 Praise performance
 Address poor performance
 Set goals & clearly communicate expectations
 Share your vision and include your team in creating it
 A motivator is one who can understand an overall goal and inspire
others to make a personal commitment to this goal
 5 ways to provide a motivating environment
 Participation: involvement in decisions that affect the team
 Environment: climate for success, creativity
 Recognition: giving credit, praise, rewards
 Knowledge: having it, communicating it
 Style: use appropriate style for each situation: coaching,
supporting, delegating, directing
30
VI.Additional Aspects of DM
Supply Chain Management
Definition: A supply chain is a group of partners who collectively convert
a basic commodity (upstream) into a finished product (downstream) that is
valued by end-customers, and who manage returns at each stage.
 Planning and controlling all of the processes that link partners in a
supply chain together in order to serve needs of the end-customer.
Process:
31
Key issues:
1. What is the relationship between material flow and information flow?
 Material flow will go from the manufacturer to the end-consumer,

and information flow will go back from the customer demand to the
manufacturer. However, the information flow also goes with the
material flow. The information flow has to ask questions such as how
long the product will take to move through the supply chain, etc. It is
mainly used within the company to monitor demand as well as
customer satisfaction. The information gathered will be evaluated
and monitored to spot problems with the material flow and come up
with ways of improving the systems being used.
 Two important notions:

- Inbound logistics: the relationship between companies and their
suppliers
- Outbound logistics: deals with how companies get products to their
customers
2. How does logistics contribute to competitive advantage?
Creating logistics advantage:

 Quality
 Time
 Costs
 Making sure products are made available to customers, for a low

price, is down to logistics management. The demands of the end
customers include receiving goods in a very short time frame,
having the correct orders delivered. Therefore, companies are able
to use these additional yet essential services as a way of being
appealing to their market and taking an advantage from their
competitors. The objectives of quality, time and costs are ways of
32
competing to provide the end customers advantages such as quick

delivery and low costs.
3. Difference between order winners and order qualifiers
There are different logistics performance objectives:

- The order winners: factors that directly and significantly help
products to win orders in the marketplace. Customers regard such
factors as key reasons for buying a product or service.
- The order qualifier: factors that are regarded by the market as an
“entry ticket”. Unless the product or service meets basic
performance standards, it will not be taken seriously.
Supply Chain Drivers :
Logistics and Channel Management

Definition of logistics:
Planning, implementing and controlling the physical flows of materials and
final goods from points of origin to points of use, to meet customer’s
needs at a profit. The movement of the right amount of the right products,
to the right place, at the right time.
Nowadays, third-party logistics providers are growing rapidly into a major

industry. They specialize in performing most or all of the logistical tasks
that manufacturers or other channel members would normally perform
themselves. They also provide service at a lower cost than the firms who
do not hire third-party providers.
The 6 main
logistics
system components:
33
1. Transportation: accounts for the highest % of the total cost of

logistics. Issue faced by the company: choosing the optimum mode
of transportation to meet customer service demands.
2. Material Handling: range of activities and equipment involved in the
placement & movement of products in storage areas. Issues:
minimizing the distance between products within the warehouse
during the course of receiving, storage and shipping. Also, issue of
choosing the kind of mechanical equipment that should be used, and
making the best use of labor when receiving, shipping and handling
the products.
3. Order processing: its importance in logistics lies in its relationship
with order cycle time – the time between when an order is placed
and when it is received by the customer. Issue is developing an
efficient order processing system.
4. Inventory Control: the firm’s attempt to hold the lowest level of
inventory that will still enable it to meet customer demand. Issue is
keeping the inventory at the lowest possible level while concurrently
planning orders for goods in large quantities.
5. Warehousing: the holding of products until they are ready to be sold.
Issue: its location, number of units warehoused, their size, design
and the question of ownership.
6. Packaging: with its associated costs, it affects the other components
of the system. Issue is using to make a significant difference in the
effectiveness and efficiency of the logistic system.
The output of a logistic system  logistic customer service: collection

of activities performed in filling orders and keeping customers happy or
creating in the customer’s mind the perception of an organization that is
easy to do business with.
Key elements of logistic customer service:

1. Product availability
2. Order cycle time
3. Distribution system flexibility
4. Distribution system information
5. Distribution system malfunction
6. Post-sale product support
Differences :
34
Key interface areas between Logistic & Channel management:

1. Defining of logistics service standards: time from order receipt to
order shipment, order size & assortment constraints, % of items out
of stock, % of orders filled accurately, order cycle time,…
2. Making sure the logistics program meets channel members’ service

standards:
3. Selling the logistics program:
35
4. Monitoring the results of the logistics program:
36
Cases:
1.Black Socks:
2.Converge:
Ex. of industrial products sold in B2B Converge
 Electronic Components Distribution
 What does an independent distributor have that a broker may not?
- Market intelligence: an independent distributor can provide valuable
insight into what is going on in the marketplace, commodity
manager can help the customer in making a LT educated decision
based on changing market conditions. This decision can be = to cost
savings and reduced risk in the supply chain.
- Q360 quality management: An independent distributor can offer a
rigorous quality inspection process utilizing the latest state-of-the-art
testing equipment, trained and certified staff and vendor
management program to ensure the authenticity of each component
being received.
- Global footprint: the independent distributor can have facilities
strategically located around the world, with an established global
logistics infrastructure and integrated systems that can provide a
range of services – from warehousing to packing and shipping for
customers.
- High industry standards: independent distributors are typically
required or expected to adhere to more stringent industry
standards. Therefore, most belong to some type of trade industry
organization, such as the IDEA and hold certifications (ISO 9001,…).
Since they offer more resources than brokers, they can also give
more certainty for their customers. An independent electronic
components distributor will stand by the product or shipment if there
ever is a problem and will remedy the issue.
 What is the difference between an independent distributor and a

broker?
- In electronic components industry, both the independent distributor
& broker help OEMs and manufacturers secure obsolete and end-of-
life parts that franchise distributors cannot.
- Goal of indep. distributor & broker = help buyer & seller find each
other.
- Value of broker: procuring electronic parts when needed, but lack
offering services. Does not have an established facility.
A broker can be a small firm or an individual with a limited supply of
parts/inventory.
- Independent distributor: offers a lot of services, in an established
facility.
37
Converge – An Arrow Company

Subsidiary of Arrow Electronics, full services & industry-leading global
supply chain partner, 35 years of experiences in electronics components
distribution. Provide data-driven supply chain solutions to customers
challenged with shortage, inventory or supply chain management needs.
Solution & Services:

- Electronic Component Sourcing services: Converge has the market
space that is essential to quickly resolve electronic component
shortages  established original equipment manufacturer &
electronic manufacturing services relationships in order to find
obsolete, hard-to-find electronic components and other hard-to-find
parts.
- Excess inventory management
- Quality program to ensure the integrity of sources and components
(inspection & testing service, supplier management, industry-
certified quality team, certifications & registrations, affiliations). The
combat counterfeits.
Obsolescence : FOM = Future Of Obsolescence Management
- Fom services: transforming obsolete components into available
parts.
- Fom analytics: transforming information overload into actionable
supply chain intelligence
- Fom Community
Computing:
- Customer designed programs
- Market intelligence
Converge Difference (= VP)
- Global Distribution Network
- Customer-focused supply chain systems: integrated systems and
tools that provide supply chain insights and deliver competitive
advantages.
- Full solution suite: end-to-end lifecycle management
Resources:
- …
- Blob
- Video
- Webinars & podcasts
 very well-structured company that put into place a system to answer a

common electronic need: find ole electronic pieces/devices that still work,
fights against product obsolescence. Offers a lot of solutions for electronic
supply chain.
3.Vente-Privée:
38
WHY HAVE THEY BEEN SUCCESSFUL IN ?

Since its creation in 2001, Vente-privée has developed a brand new and
innovative distribution model: The flash sales. The company’s marketing
strategy aims to transform sales into unique events as it offers
products and services from various brands, at very advantageous
prices, for a limited period of time, to a limited number of
registered people following the principle: first come, first served. By
doing so, Vente-privée has become the leading platform enabling large
brands to sell their unsold stocks in a premium way.
 First of all, the destocking aspect of the company’s business
model is central to the company’s success given the fact that people
will always be interested in buying things for a cheapest price.
However, their whole marketing strategy creates a sense of
exclusivity, which is even more important for its success as the
ephemeral aspect of its online limited offers pushes the
consumers to react quickly and more passionately than
usual. Indeed, as the consumers feel privileged to have this
purchase opportunity, they are determined to not waste their
chance, which clearly impacts positively their immediate purchase
intentions even though they do not necessarily need the product at
that time.
 The success of Vente-privée is also largely due to the fact that
customers satisfaction is put as the priority number 1, which
is widely notable in every action taken by the company.
o Indeed, Vente-privée never neglects quality although the
company is dealing with a substantial sales volume, it usually
doesn’t use paid advertisements (e.g. google) to not
bother its customers and, last but not least, it has an
excellent after-sale services to enhance their customers’
experience.
o Moreover, Vente-privee offers a broad range of products
and services ranging from travels, to food and beverage
passing by clothes, which enables the company to interest a
large audience, as there’s something for all tastes.
 Every element is reunited to enhance and spread a positive
word-of-mouth, which is also very central to the company’s
success as one of the principal promotional mean.
 Secondly, given its business model, Vente-privée is particularly
dependent on the brands as without them, the company will
have nothing to sell. Hence, its success is partly due to the fact that
it has developed a win-win model which is interesting for
both itself and the brands. On one hand, Vente-privée benefits
from the discontinued items of the partner brands at preferential
prices and on the other hand, the partner brands have a simple,
trustful and elegant way to get rid of their old unsold collections. By
doing so, Vente-privée acts as an additional distribution
channel for the brands and helps to increase their brand
awareness and the loyalty of their customers as well as
39
reaching a pool of new customers but without competing

against the main distribution channels of the brands.
Remarks of teacher:
Veepee achieved a 3.7 billion Euro turnover (tax included) as of 2018.
Present in 14 countries now, Veepee is taking a leading role in the
European digital commerce landscape.
These last years, the group has initiated a decisive transformation to go
from a fashion retailer to a real multi-specialist online shop with
it’s own distinct fashion, home, travel, sport, beauty, kids, food &
beverage and entertainment universes. Our 72 million members have
access to high-end brands across these domains through private
online sales with a welcoming and meaningful online experience.
Their success is due to the following key factors:

 The consolidation of so-called traditional sales
 The development of new services and new factors (including travel
offers, wine and arts)
 The expansion in Europe
WHERE ARE THE KEY CHALLENGES FOR SUCH A CONCEPT ?

Several challenges are to be found with such a concept, which can be
related to both online and physical actors.
 First of all, phyisical stores have something that e-stores will never
have, the tangible aspect of the products. Consequently, one big
challenge for concepts that only sell products online is to find a
way to convince the clients about the quality of the products
with less human contact and most importantly without them
seeing the product with their eyes. This is the reason why
Vente-privée puts great emphasis in the way to present its
offers creatively and attractively.
 Secondly, Vente-privee’s concept leads to another challenge, which
is to convince prestigious brands to create partnerships and
thus associate their brand image with the company and its
others partners, as brands are usually afraid of losing part of the
control over their image. Therefore, Vente-privée needs to
manage carefully its reputation and avoid scandals.
 Thirdly, the supply chain management is a real challenge given
the fact that Vente-privée doesn’t have its own stocks but
simply acquire goods from brands before reselling them to
consumers. This is even more complex in terms of parcel
preparation as one consumer can buy goods from different brands
which then need to be assembled in one box and delivered in a a
short delay.
o Indeed, customers are very demanding regarding the
delivery time especially as other online actors, such as
Amazon, have their own stocks, which enable them to be more
reactive.
40
o Moreover, the fact that the company is dealing with a very

large amount of products sold and has to replace its
offer constantly is another dimension which complexify its
operational system, which hence has to remain very flexible
and evolving.
41
WHERE DO YOU SEE THEIR KEY COMPETENCE ?

As an online shop, Vente-privee has always put great emphasis on
innovation and technology.
 For instance, the quality of the content shown on their
website, as much for pictures as for videos or quality of their
models, is a priority. One of their key activity and key competency is
thus to shoot and film every product that will be sold in their
platform. It is interesting to note that everything is done
internally in their studios, from the make-up to the photo editing as
well as the music and the decoration. By doing this internally, they
keep the entire control and can thus be very flexible in order
to satisfy the expectations of their partner brands. Hence, they can
guarantee a certain quality of the content provided on the
website which is, as mentioned before, crucial for online platforms.
 Another key core compence of Vente-privée regards its impressive
customer relationship management and more broadly their
data analysis. Indeed, they are able to make every customer
feel special as they have the necessary technology to analyse
them and propose them personalised offers based on their tastes.
This also enables the company to act as a useful partner for the
brands as they can provide them with deep consumer
insights and a full marketing diagnosis based on their
experience and observations. All of those elements enable
Vente-privée to be much more than a simple destocking company as
they can maintain a privileged relationships with thousands of
members and truly create a sense of belongings while accompany
numerous brands in their optimization of sales and customers
understanding.
Indeed, their marketing strategy focus on 3 axes: Close relationship
with the brands, proximity with club members and the quality of
the experience. Those are the pillars which have enbale the company to
stand where it is today.
Remarks of the teacher:

The proclaimed USPs are the following:
 Innovation: “We are the European innovation of online flash sales.
We have more than 25 years experience in selling exclusive fashion
and lifestyle products. Our unique sales events are a exciting new
way to shop. Vive la shopping revolution”
 Designer brands: “We’ve collected together a portfolio of more
than 2500 designer brands to give heart-fluttering discounts of up to
70%. We love fashion and adore anything that’s stylish: from
homeware to sports equipment, cars to holidays. C’est fabuleux”
 Flash sales: “Are you ready for an exciting shopping rendez-vous?
We’ll send an email invitation and trailer giving a tantalising preview
of our designer sales. Steady? Be quick, the sales aren’t open for
long… Allez!”
 Quality: “Quality is très important and we hand-pick all our
products. We use the latest technology to ensure our website is
42
chick and easy-to-use. Need any help? We’re always ready to swing
into action”.
 Exclusivity: “As a member of VP, enjoy exclusive access to all our
chic sales – it’s fabulously free to sign up! Tempted?”
43
The company claims having core expertise in 5 key areas:

 Audio-visual production
 Logistics
 Technology
 Marketing
 Customer service
HOW SHALL THEIR DISTRIBUTION LOOK LIKE IN 5 YEARS FROM

NOW ?
To continue to propose the best solutions to the brands as well as an
always more surprising shopping experience to its members, Vente-privée
will have to keep putting great emphasis on innovation and
technology, especially as the competition is increasing in everything
related to online platforms. The company will have to continue
developing its activities in new markets but it will also have to
explore new ways to develop brand loyalty and win new market
shares.
 It could for instance try to develop an innovative cross-canal
strategy by selling coupon at a low price (e.g. 20$) which could
then be used to buy goods in shop with a higher value (e.g. 50$).
 It could also expand its activities to not only the destocking of
old goods at a discount rate but also as a platform to try new
goods before launching them in real life. This would be
beneficial for a particular brand to gather insights and to test a
product in small quantity and see if it works before launching it
nationally.
 Moreover, Vente-privée will have to find a way to use its data to
anticipate optimally the place of sale and hence shorten its
delivery time by buying in advance and upstream the order.
4.Tesla Case:
Tesla distribution model:
“In many aspects, it would be easier to pursue the traditional franchise
dealership model, as we could save a lot of money on construction and
gain widespread distribution overnight, many argue we should do this just
like other manufacturers, so why have we taken a unique path?”
- Conflict of interest between selling gasoline cars, which constitute

the vast majority of their business, and selling the new technology of
electric cars.
o Technology & performance is higher than other traditional cars
o Supercharging
o Over the ai updates
 Difficult comparison for dealers that still have to sell larger numbers
of old technology gasoline cars.
44
- Fairness & franchising: “we have granted no franchises anywhere in

the world that will be harmed by us opening stores”
- Service coverage: we believe service is a top priority for every
customer and will always be.
- Other advantages:
o Simplified process (administrative & financial), as everything is
centralized
o No massive stock
o Same experience and same DNA in every store, everywhere in
the world
o Client information are centralized
o Easier to communicate, make quick changes & implement
them globally
- Stores:
o Location in high foot traffic, high visibility retail venues like
malls and shopping streets.
o Designed to be informative and interactive in a delightful way,
simply unlike traditional dealerships  “our technology is
different, our cars are different, and, as a result, our stores are
intentionally different’
45

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Distribution Management Spring/Summer 2019

III. DEVELOPING THE DISTRIB.

IV. MANAGING THE DISTRIB. CHANNEL

VI. ADDITIONAL ASPECTS OF DISTRIB.

Distribution Management: course

The perfect example with all the ingredients of a successful distribution

II. Distribution Channel Systems

The growing importance of distribution channels

The advantages of focusing on a better channel strategy:

How distribution channels relate to the marketing mix

Marketing Mix, 4 Ps Challenges

The flows in the distribution channels

Both part of distribution variable

Concerned with the entire Focused specifically on

Manufacturer  Wholesalers  Retailers  Consumers

Manufacturers  Transportation Cny  Wholesalers  Retailers 

The channel participants:

What are the motivations of shifting task to intermediaries?

Intermediaries: spread large fixed costs over large quantities of diverse

III. Developing the Distribution

The role of distribution in the firm’s overall objectives & strategies

The role of distribution in the marketing mix: PLACE

The 4 most important factors to make Strategic Distribution decisions are:

channel member is an independent entity, rewarding opportunities

Finding the right distribution partners: viewing the relationship with

Distinguishing points of the definition include:

Who engages in channel design?

Firms:  Look down the channel toward the

Retailers  Look up the channel to secure

Channel design roadmap:

2. Set & coordinate distribution objectives:

4. Channel structure dimensions:

o Nature & size of the market

 Intensity at the various levels: This relates to the relationship

 Types of intermediaries at each level: There are numerous

o Availability: Availability of intermediaries influences

 Macro-environmental variables: The impact of the macro-

7.  Selection of channel members

Framework for market analysis

1. Market geography: refers to the geographical extent of markets and

market geography relative to channel structure to ensure that the

2. Market size: refers to the number of buyers or potential buyers

3. Market behaviour: consists of 4 sub-dimensions:

4. Market density: refers to the number of buyers or potential buyers

Digital Distribution Channels

A mono-channel distribution, no matter if digitalized or not, gives the

The biggest barrier to implementing omni-channel are cost and complexity

- E-commerce: commercial transactions conducted electronically on

IV. Managing the Distribution

Motivation Management: the actions

Channel Management = a company’s activities in organizing its

Effective channel management requires that the channel manager be

Channel management involves more than just motivation management;

Leadership in the channels:

Channel member needs & problem:

1. Research studies of channel members  less than 1% of

 What makes marketing channel audits most effective?

4. Distributor advisory councils

Product and Channel Management