106 CHAPTER 16: Distribution Strategies Chapter 16 Distribution Strategies A Channel-Structure Strategy (TM 16-1) Direct Distribution Indirect Distribution B Distribution-Scope Strategy (TM 16-2 and TM 16-3) Exclusive Distribution Intensive Distribution Selective Distribution C Multiple-Channel Strategy (TM 16-4) Complementary Channels Competitive Channels D Channel-Modification Strategy (TM 16-5) E Channel-Control Strategy (TM 16-6) F Channel-Conflict Strategy (TM 16-7) 107 CHAPTER 16: Distribution Strategies 16-1 CHANNEL-STRUCTURE STRATEGY Typical Channel Structures CHAPTER 16: Distribution Strategies 108 Source: Gary L Frazier, “Designing Channels of Distribution,” The Channel for Communication (Seattle, Wash.: Center for Retail and Distribution Management, University of Washington, 1987), pp 3–7 109 CHAPTER 16: Distribution Strategies 16-3 DISTRIBUTION-SCOPE STRATEGY For an efficient channel network, the manufacturer should clearly define the target customers it intends to reach The strategic alternatives here are exclusive distribution, selective distribution, and intensive distribution 16-4 MULTIPLE-CHANNEL STRATEGY The multiple-channel strategy refers to a situation in which two or more different channels are employed for distribution of goods and services The market must be segmented so that each segment is provided the services it needs and pays for them, but is not charged for services it does not need CHAPTER 16: Distribution Strategies 110 16-5 CHANNEL-MODIFICATION STRATEGY Reasons for a shift in existing channels include: • Changes in consumer markets and buying habits • Development of new needs in relation to service, parts, or technical help • Changes in competitors’ perspectives • Changes in relative importance of outlet types • Changes in manufacturer’s financial strength • Changes in the sales volume level of existing products • Changes in product (addition of new products), price (substantial reduction in price to gain dominant position), or promotion (greater emphasis on advertising) strategies 111 CHAPTER 16: Distribution Strategies 16-6 CHANNEL-CONTROL STRATEGY Vertical marketing systems may be defined as professionally managed and centrally programmed networks that are pre-engineered to achieve opera-ting economies and maximum market impact Stated alternatively, vertical marketing systems are rationalized and capital-intensive networks designed to achieve technological, managerial, and promo-tional economies through the integration, coordina-tion, and synchronization of marketing flows from points of production to points of ultimate use They can be classified as: • Corporate • Administered • Contractual CHAPTER 16: Distribution Strategies 112 16-7 CHANNEL-CONFLICT STRATEGY Channel conflict may be defined as a situation in which one channel member perceives another channel member(s) to be engaged in behavior that is preventing or impeding it from achieving its goals Disagreement between channel members may arise from incompatible desires and needs ...107 CHAPTER 16: Distribution Strategies 16- 1 CHANNEL-STRUCTURE STRATEGY Typical Channel Structures CHAPTER 16: Distribution Strategies 108 Source: Gary L Frazier, “Designing Channels of Distribution, ”... Communication (Seattle, Wash.: Center for Retail and Distribution Management, University of Washington, 1987), pp 3–7 109 CHAPTER 16: Distribution Strategies 16- 3 DISTRIBUTION- SCOPE STRATEGY For an efficient... gain dominant position), or promotion (greater emphasis on advertising) strategies 111 CHAPTER 16: Distribution Strategies 16- 6 CHANNEL-CONTROL STRATEGY Vertical marketing systems may be defined