Physical Distribution
Physical Distribution
Physical Distribution
1
Channel Objectives
• Marketing channels exist to create utility for
customers
• Place utility—availability of a product or service in a
location that is convenient to a potential customer
• Time utility—availability of a product or service when
desired by a customer
• Form utility—availability of the product processed,
prepared, in proper condition and/or ready to use
• Information utility—availability of answers to
questions and general communication about useful
product features and benefits
12-2
Distribution Channels:
Terminology and Structure
• Distribution is the physical flow of goods through
channels
• Channels are made up of a coordinated group of
individuals or firms that perform functions that add utility
to a product or service
• Distributor—wholesale intermediary that typically carries
product lines or brands on a selective basis
• Agent—an intermediary who negotiates transactions
between two or more parties but does not take title to
the goods being purchased or sold
Manufacturer Manufacturer
Manufacturer Sales Force Sales Force
Agents &
Sales Force
Brokers
Wholesaler Wholesaler
Wholesaler
Customers
Global Marketing- Schrage 12 12-4
Peer-to-Peer Selling
• The Internet and other related media
are dramatically altering distribution
• Ebay pioneered P2P and now helps
Disney and IBM set up websites for
fixed price selling as well as B2C
auctions
• Interactive TV may become a viable
direct marketing channel in the future
• Manufacturer-owned stores
• Walt Disney opening 600 new stores globally
• Nike, Levi Strauss, Apple
• Independent franchise
• Independent retailers
• Wal-Mart
Manufacturer’s Distributor
Sales Force or Agent
Customers
Virgin,
Gap
IKEA Toys “R” Us
Manufacturers brands
Own-label Focus
Chain
Organic
acquisition
Joint
Franchise
Venture
12-24
MODES
• Over 13,000 ships transit the Canal each year, hauling an estimated 4% of the
world's goods around the globe.
• Has implemented a $1billion improvement program to maintain the Canal and keep
it competitive.
■ The program includes the widening of the narrow Gaillard Cut allowing two-
way traffic for even the largest ships and increasing Canal capacity.
■ Canal currently at 95% capacity, by 2007 expected to be capacity constrained