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Example of Diagnostic Datribution by Alcatal

This document discusses different distribution methods used by companies to sell their products. It provides examples of companies that changed their distribution strategies based on their needs and market conditions. The key factors for companies to consider when choosing a distribution channel are cost-efficiency, control over distribution partners, and the ability to modify channels in response to market changes. Direct sales, retail sales, and use of distributors are all distribution methods discussed in the document.

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JosephVin Lopez
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141 views

Example of Diagnostic Datribution by Alcatal

This document discusses different distribution methods used by companies to sell their products. It provides examples of companies that changed their distribution strategies based on their needs and market conditions. The key factors for companies to consider when choosing a distribution channel are cost-efficiency, control over distribution partners, and the ability to modify channels in response to market changes. Direct sales, retail sales, and use of distributors are all distribution methods discussed in the document.

Uploaded by

JosephVin Lopez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Example of Diagnostic Datribution by Alcatal

 Email to create awareness of their new phone models or to get pro request for more
information.

 Outbound telemarketing to increase the base of prospects responding as w as to pre-qualify


the prospect's interest level

 Face-to-face visits may be done for corporations interested in bulk purchase Closing of sales
can be done immediately through the company's executive or through accredited
distributors.

 A chain of accredited service centers can be appointed for the conver and after-sales service
requirements of the customers.

Exhibit 48-3: Diagnostic Distribution


Selling Cycle Distribution Method
Prospecting (Sales Leads E-mail
Generation)
Qualifying Sales Telemarketing
Approach Direct Selling
Sales Probing
Sales Presentation
Handling Objections
Demonstration Retailing
Closing
After-sales Service Independent Service Center

Firms may adapt or change their distribution methods depending on their


needs during different scenarios.

Examples:

 Imarflex turbo broiler was initially pulled out from retail stores because
nobody knew what it was. It then shifted to direct selling to properly
demonstrate the versatile cooking gadget in the homes of the
consumers. Today, the product's back in the retail store level as
consumers are already aware of what is it and how it works.
 Waters Bio Mineral Pot used to be sold in appliance stores. When it was
pulled out, sales went up 10 times as it shifted to a direct sales model
where is features and benefits can be explained and emphasized well.

 Calpol syrup was being retailed by medical representatives to doctors.


Later, the product was converted into an over-the-counter consumer
product and sales volume almost doubled in a year while market shares
improved versus competition.

Selling cycle will be discussed further in the last


promotions mix section on selling ere the differences
between direct to consumer selling and distribution
selling to ses will be distinguished.

Evaluating Distribution Channels


Consider the following distribution strategies in the selling of cosmetics:

 Avon distributes their products through direct selling. The "Avon


Ladies" sell Avon products in homes of middle class families as well as
to employees in offices.

 Nu Skin uses the network marketing model in promoting their products


to the AB market.

 Happy Skin sells their products through retail stores.

What influenced these personal care brands in deciding on


their distribution method? Marketers must be careful in
choosing their distribution system, as each channel will
produce different levels of costs and sales volume. In
evaluating alternative distribution channels, the 3Cs of
distribution must be considered: cost-efficiency. control,
and channel modification.
a. Cost-efficiency
It is important to estimate the long-term impact of having one's own
sales force versus appointing a distributor. Once sales volume
increases to an economic level. aving one's own sales force may or
may not be more cost-efficient. However, a sudden shift from
distributor to an in-house sales force after a distributor has helped a
company attain the economical volume leaves a "bad taste in the
mouth" and is consistent with the Filipino value of "utang-na-loob".
Examples:
 Philippine Match Company (PHIMCO) found it more cost-efficient to
hire their own sales force in Manila and Luzon even if they are
manufacturing only a single product line matches. For Visayas and
Mindanao, distributors whose income depends on the volume they sell
were appointed. This is because PHIMCO's would have been faced with
increased costs for Visayas and Mindanao (compared to Manila and
Luzon) considering the plane fare and other expenses involved in sales
supervision, audit and management.

 Many multinationals like Colgate-Palmolive have shifted their ex-truck


operato from their own sales force to distributors since the mid 1980s.
This i because it is more cost-efficient for others to maintain an ex-truck
operation.

b. Control
As distributors are not the company's employees, they may
have different priore Profit may be their main objective
while the firm's objective may be market penetratio and
markel shares. It is important that the objectives, priorities
and expectations of the firm be communicated and agreed
upon before principals are chosen and distributors are
appointed.
Examples:
• A consumer durable company had major differences
with their foreign principal. The distributor was
market shares oriented while the principal was profit-
oriented. These views only became clear after an
international sales competition was abruptly stopped
due to the bad domestic business of the foreign
principal.

 A manufacturer appointed a profit-oriented distributor


who did so well he bought the building he was renting
at that time. The money gained from the business was
invested in a hotel and restaurant but the priority to
the original business deteriorated when cheaper
competition entered the business.
c. Channel Modification
The marketplace is ever-changing. The flexibility to modify
distribution may be needed.
Examples:
• The aggressive marketing of Sensation and Trust brands
increased the acceptability and the market of condoms. They
need not be limited to drugstores but may include
supermarkets, convenience stores, personal care stores, and
vending machines as well.

• Shell appointed Crystal Clear to deliver Shell LPGs, using the


latter's existing neighborhood-delivery strength

Other changes in the consumer purchasing pattern


such as when the product matures, when new
competition arises, and when innovative distribution
emerge must also be considered.
In addition, the distribution critiea in exhibit 4B-4
provide a guid as to when to use middlemen and when
to sell direct.

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