Page 382 - Introduction to Business

356 PART 3 Marketing

benefit from them. Sales literature should not be distributed only to the prospects
and customers; it should also be given to public relations personnel who can dis-
perse it among the company’s various publics. 12

The Distribution Mix

distribution mix The channels of The distribution mix refers to the channels of distribution and logistics operations
distribution and logistics operations a a company uses to move its products to its customers.
company uses to move its products to
its customers
Channels of Distribution

LEARNING OBJECTIVE 5
Distinguish between the channels of distribution for consumer products and
for industrial products.

Wholesalers and retailers are the major channels of distribution a company can
employ in developing its mix of channels of distribution. The way in which they are
used often depends on the type of product involved. Exhibit 10.8 shows the usual
channels of distribution for consumer products.
About 50 percent of all consumer products flow through wholesalers and retail-
ers to reach consumers. Around 45 percent move only through retailers. What about
the other 5 percent? The other 5 percent do not use channels of distribution; they
go directly from the manufacturer to the consumer. Companies like Amway, Mary
Kay Cosmetics, and Avon use a direct strategy to sell their products.

reality Think about your most recent five or six visits to a supermarket. What
CH ECK did you like and dislike about these experiences?

The channels of distribution options for industrial goods are also indicated in
Exhibit 10.8. Eighty percent of industrial goods go directly from the manufacturer
EXHIBIT 10.8 to the industrial buyer, such as other manufacturers, processors, construction
firms, and so on. In other words, they do not use channels. Only 20 percent of
Typical Distribution
Channels for Consumer and industrial goods involve the use of distribution channels (wholesalers) to reach the
Industrial Products industrial buyer customer.
Why would a company not
use distribution channels? Com-
(a) Consumer Products
panies that want to retain control
over the marketing effort for their
Manufacturer Wholesaler Retailer Consumer
products would elect a direct
strategy, especially if they them-
Manufacturer Retailer Consumer selves have the required market-
ing skills. A direct strategy is more
costly than an indirect one. For
Manufacturer Consumer example, salespeople need to be
hired, trained, and paid. Thus,
companies pursuing a direct stra-
(b) Industrial Products tegy need to have sufficient funds
to support this option. Customer
Industrial
Manufacturer Wholesaler preferences are an important
buyer
variable, also. Some—like many
industrial buyers—want to pur-
Industrial
Manufacturer chase directly from manufac-
buyer
turers. They want to talk face-to-

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