Distribution Policy

Distribution policy

As part of the distribution policy marketing management decides how the product reaches the end-customer. On the one hand, the optimal sales channels for the product must be defined.

Management has the choice between direct sales through proprietary distribution channels, the indirect sales through distributors and sales agents or a combination of both forms of distribution.

Also, the distribution policy deals with the logistics side of the distribution and the transport of goods.

What influences the distribution policy?

  • The end users
  • The product characteristics
  • The competition situation
  • The economic opportunities of the company
  • Legal factors.

What needs to be considered?

  • The characteristics of the products, so for example, are very complex products often best through direct sales to distribute
  • The situation of the products on the market, the use of a trade representative may improve the sales opportunities during the introductory phase
  • The spatial distribution of the customers, for example, direct distribution is very costly if customers are further dispersed
  • The purchasing habits of the customer, here market research results must indicate where the customer wants to buy the products
  • The competition situation, in particular the opportunity to use gaps in the sales system of the competitors
  • the cost of distribution, which among other things, personnel costs , transport costs, space and energy costs for storage composed
  • The financial situation of the company and the available experience and skills within the company
  • Legal restrictions on the choice of distribution channels by means of existing contracts, compensatory claims, for example, by means of commercial representatives in the event of early withdrawal and claims for equal treatment of all enterprises (prohibition of discrimination and boycott of certain undertakings).

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