Key Considerations for Effective Distribution Strategy PPT
This PPT slide, part of the 159-slide Strategy Frameworks Manual PowerPoint presentation, outlines critical decisions involved in developing a distribution strategy, focusing on channel length and breadth. It highlights 3 main factors influencing channel length: customer requirements, account concentration, and the degree of control over direct customer contact.
Customer requirements emphasize the need for direct relationships in cases where service and repair are crucial. For instance, industries like aerospace may necessitate direct engagement due to the complexity and specificity of customer needs. Conversely, account concentration suggests that when a few customers dominate sales, direct selling is more efficient. In contrast, broader markets, like consumer goods, benefit from indirect channels, allowing retailers to manage multiple products and customer relationships.
The slide also discusses channel breadth, specifically the intensity of distribution. It categorizes distribution into 3 types: exclusive, selective, and intensive. Exclusive distribution involves a limited number of distributors, often used for specialty goods. This approach can enhance dealer loyalty and provide manufacturers with greater control over distribution. However, market dynamics can shift, making exclusive arrangements less viable, as seen in the automotive sector where consumers increasingly prefer diverse purchasing options.
Overall, the slide serves as a guide for executives to consider how to structure their distribution strategy effectively. It underscores the importance of aligning distribution choices with customer needs and market conditions, ultimately influencing sales performance and customer satisfaction. Understanding these elements can help organizations make informed decisions that enhance their market presence and operational efficiency.
This slide is part of the Strategy Frameworks Manual PowerPoint presentation.
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