Managing Distribution Relationships

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Managing Distribution Relationships

• Week 9

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What did you learn from this weeks readings?
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Importance of Distribution Structure

• Most products and services will pass through or
  be conducted by distributors of some composition
• Network position can be central
• Nexus between manufacturer / end consumer
• Efficiently and economical flow of goods
  services towards the end consumer
• Information Service / collection / knowledge

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Changes to distribution channels

• International channels
• Japan
• America Reading Anderson et al 1997
• China Reading Jiang Prater 2002
• Europe
• Globalisation
• Service Industries

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Forces changing distribution

• Customer needs changing
• Bundling ?increasing relationship complexity
• Customisation ?adaptations complexity
• Production changes ?flexible engineering
• Customer expectations ?global competition
  expectations higher
• Higher differentiation within the network
  ?channel diversity increases to cater for the
  above forces see figure 6.3

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• Power distribution within channel
• Consolidation within the channel
• Bargaining Power
• Knowledgeable Trained buyers
• Backward integration

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• Strategic Priorities
• Value Delivery
• Change existing processes
• Activity rationalisation
• Technological Revolution
• Direct marketing
• Database marketing
• Optimisation of quick shipment systems
• Production processes changing

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Conclusion

• Changing requirements in distribution require
  changes to management practices
• Activity Rationalisation
• Relationships changing in their variety and
  complexity - numerous approaches required
• Key Account Management becoming necessity
• Distribution ?Competitive Advantage? Dell
• Activities changing with some going further
  towards the customer