Distribution The Place P of the 4 P's
- All functions use resources, can be
improved through specialization, and are
shiftable burdens among channel members.
- Who should do what?
- It depends on...
- Relative effectiveness and efficiency.
- Often having middlemen can be more efficient
- Channel flows
- Goods,
- title,
- payment,
- information,
- promotion
- title,
- Channels for Services
- Place related services
- customer access to location
- customer proximity to location
- Non-place related services
- information businesses
- access to people (contacts)
- Ways to Classify Retailers
- Store vs Non-Store
- Discount vs full price
- Specialty vs General
- Category killer
- On-line vs. physical
- Catalog vs. On-line
- Ways to Classify Wholesalers
- Full service
- Brokerage
- Store and forward
Third party logistics companies: a growing trend
The basic concept is that all or part of the logistical functions can be contracted out. This has been done piecemeal forever, as in hiring a shipper. More recently, a new breed of business has appeared that offer to manage any or all of the logistical functions involved with getting goods from the factory to the retailer or end customer.- Third party warehouses (exclusive or shared)
- Third party fullfillment houses
- order processing, billing
- assorting, packing, and shipping
- Distribution elasticity of demand
- percentage change in Q for a change in distribution ease
- Hard to measure, but worth a try.
- Relates to classification of goods as
- Convenience
- Shopping
- Specialty
- Shopping
- Hard to measure, but worth a try.
- The special utilities of time, place, and possession are created by the distribution channel.
Which parts of the channel specialize in creating which utilities?
Hint: When you want to use something later, you store it. When you want to get something from where it is to you, you have it shipped.
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