Distribution (business)

The distribution policy (including the distribution mix, distribution policy or Place within the marketing mix, from Latin distributio distribution " ) designed within the marketing decisions and sales activities in the path of a product or service from the provider to the customer or user. A distinction is made between the logistic (transport and storage ) and the acquisition- distribution, where it comes to the design of the sales strategy and sales process ( customer acquisition and customer loyalty ). Because of the increasing importance of the acquisitive aspect distribution policy is increasingly being replaced by sales policy in recent textbooks.

• 3.1 Overview 3.1.1 Direct Sales
• 3.1.2 Indirect Sales
• 3.1.3 Special forms of distribution
• 3.1.4 Single - vs. Multi- Channel Distribution

Decision areas

The distribution policy is concerned with the question in which way and in what ways the products of the manufacturers get to the buyers. Four main areas are to be distinguished:

• Physical distribution ( distribution logistics )
• Acquisition- distribution ( design of the sales process including choice of distribution channels and the acquisition method)
• Selection and qualification of personnel for sales ( sales skills )
• Numeric and weighted distribution ( distribution level )

In addition, the distribution policy includes decisions about

• Distribution organs
• By the acquisitive Distribution (Sales ) Customer contacts are established, achieved market coverage as well as the revenue generated.
• Due to the distribution logistics costs while generates, on the other hand, this allows a high level of service as a basis of customer satisfaction. This respect, the distribution policy, like all other instrumental aspects of marketing both a cost and a revenue source dar. Moreover, with the decision on the marketing approach course for the use of other marketing tools provided.

In particular, the paragraph -way selector is the distribution policy referred to as Channel Marketing and Channel Management, Channel where stands for the distribution channel or sales channel.

Factors

Influencing factors on distribution policy decisions are:

Performance-related factors

These include all the features that require a special form of distribution or logistics, for example,

• Needs to explain performance,
• Shelf life of the asset and
• Transport capacity of the power

Customer-related factors

These relate to the requirements and expectations on the part of current and potential customers:

• Number of customers (few, many )
• Geographical distribution ( crowded, widely distributed ),
• Purchase frequency ( frequency required by the customer ),
• Shopping habits ( geographically, temporally, preferential procurement channels ) and
• Receptiveness to sales methods such as online stores, shop- TV or power shopping.
• Who comes to who? ( Business to customers / clients to company)

Competition -related factors

Depending on the competitive forces distribution policy decisions are also influenced by the competitive behavior, which in principle offer the possibilities of withdrawal or adaptation to competitive methods, namely with regard to

• Number of competitors,
• Market position of the competitors,
• Type of competitive products and
• Distribution channels (such as shipping, doorstep selling, Internet).

Business-related factors

Of course, the factors of the respective operation can not be neglected. Numerous factors affect the room for maneuver, such as

• Size,
• Financial strength,
• Experiences,
• Market design and
• Market power.

Legal factors

Finally, the legal framework characterize distribution policy decisions; generally have to be checked

• Protection of distribution restraints in certain industries,
• Loading and distribution reluctance of certain business forms,
• Compensation claims, for example, the commercial agent on termination of business relationships and
• Possible prohibitions of discrimination and boycotts.

Acquisition- distribution

The selection of sales channels and distribution channels is an essential task of the sales strategy. Basically, one can distinguish between direct and indirect sales channels. One arranges the distribution policy base options the institutional economics of transaction type band " market, cooperation, integration or hierarchy ", so can be direct distribution systems characterize as a vertically - integrated transaction forms that often are characterized by the marketing leadership of the manufacturer level (secured distribution or Secured distribution). Indirect distribution systems, that is, Systems in which consumer goods manufacturers are through the involvement of independent intermediaries, particularly commercial enterprises, in an indirect distributive relationship to the consumer are classified as market-based transaction form (conventional distribution systems ), provided that the sales agents do not go beyond the contract of sale contracts or contractual relations chat with the producer level. Between these two poles of the transaction form type band a broad spectrum exists vertically - cooperative, in terms of the level of binding of the trade to the manufacturer level and thus the power potential of the manufacturer level, more or less overlapping forms of distribution ( controlled distribution or controlled distribution).

Survey

The market in which the company intends to market its services must be processed differently depending on the business goal, Sales Strategy and status of the product life cycle of a benefit. The nature of the performance and the target market here have an influence on the choice of distribution channels.

The business goal (penetration or absorption ) depends on the state of a power within their life cycle. This has an influence on the intensity of market development and thus on the choice of pricing policy and the means of market communication.

The distribution policy so strategically corresponds with the adjacent areas within the marketing and creates operational goals for the quick sale. To this end, the company are the different sales channels in the sale are available:

• Direct sales Company-owned sales offices (eg outlets)
• Personal direct
• Telephone Sales
• E -commerce

• Indirect Sales commercial sale
• Commission sale
• Franchising

• Special forms of distribution

Direct sales

In direct sales, the performance changes after production once the owner, namely from the manufacturer to customers. This form is found primarily in selling to businesses, where there are specialized direct sales company entirely on sales to end customers. This then advertise with the veritable customer benefit of saving high interim costs. Direct selling can occur either in person or via electronic media.

Especially in light of new information and communication technologies, the importance of direct sales. The tendency of the direct sales of investment goods is strong, while consumer goods outweighs the indirect sales. This is related to the statement of need and consideration of individual requirements for capital goods. Capital goods consist of a bundle of goods and services, so often one or more manufacturers adopt the acquisition function as part of a system selling.

Indirect Sales

In the regular distribution through wholesale and retail company 's performance changes after production usually ownership several times along the so-called value chain. Especially in the consumer market, where it arrives on an area-wide distribution of large quantities of goods and their presentation in a retail store, sales through trading companies (trade sale ) is prevalent, often dealers are turned into sales.

In the indirect sales is switched as intermediaries regularly the wholesale and / or retail. Here, various criteria must be considered such as the desired ubiquity or the distribution level, the selection of suitable plants ( exclusive, selective or mass distribution) as well as the development of the business. A special form is the Commission sale by retail companies, in which the products remain until the sale of property of the manufacturer.

For indirect sales and sales through sales representatives ( agents ) or commercial agencies counts ( agencies). Representatives are entrusted as an independent trader in order to broker business for one or more companies or complete ( Einfirmen-/Mehrfirmenvertreter ). On the basis of a legal permanent debt ratio ( agency agreement ) are sales representatives in the name and for the account active. The growth, the increasing self- marketing ( sales representatives marketing) as well as the increasing importance of trade missions back Handelsvertretungen more and more to the rank of independent distribution systems. The trade negotiations as a link between the levels of the market play in the German economy a significant role. They provide goods annually worth about 175 billion euros, including a self- sales of about 5 billion euros per year. In order for a switch- level results in the domestic commodity flows of 30 percent.

In franchising, distribution is likewise through legally independent companies ( franchisees), however, your so-called franchise fees for the use of the system standard design, a single name and appearance to the outside. Advantages for the franchisee, especially in well-branded systems that have a high reputation from the beginning, comparatively favorable purchasing conditions and support in the commercial area.

Special forms of distribution

In the Commission's Rules ( consignment sales) an enterprise has the power in its own name but for the account of. The commission takes the power into custody and care of the initiation of the acquisition. The capital risk remains with the manufacturer or importer.

The broker is not acting by mutual agreement because the broker is not obliged to act. Typical of the broker is in contrast to sales activity in which an entrepreneur sells constantly produced new services that the brokerage is related to a particular business.

Single - vs. Multi- Channel Distribution

While the distribution practice in the past tended to focus on one sale ( single-channel Distribution), companies are developing with the increasing acceptance of the Internet multiple marketing channels simultaneously ( multi-channel distribution). As a multi- channel distribution of the simultaneous use of multiple distribution channels such as retail, Internet and outdoor service is called.

Physical Distribution

Another meaning of the term arises from the need in the commercial distribution of goods over long distances or large areas. Here the concept of distribution has a logistical nature and is used in addition to the pure transport terms, especially for the number of outlets that lead to a particular product. The degree distribution here indicates how many trading companies lead the product of a manufacturer, expressed as a percentage of all retail companies, the criteria for inclusion of the product come into their maximum range in question.