Marketing Distribution Channels

Exclusive Distribution

• An extreme form of selective distribution where only one wholesaler, retailer, or distributor is used in a specific geographical area.
• Franchises are an example of exclusive distribution (e.g., Pizza Hut, Burger King).
• Apple operates its own retail stores worldwide, offering a full range of Apple products, including the iPhone.

Types of Intermediaries

• Four main types of intermediaries:
  • Agents
  • Wholesalers
  • Distributors
  • Retailers

Agents/Brokers

• Act as an extension of the manufacturing company.
• Represent the producer to the final user in selling a product.
• Do not own the product directly, but take possession during the distribution process.
• Profit through fees or commissions.

Wholesalers

• Independently owned and take title to the goods and services they sell.
• Buy in bulk and store products in their own warehouses until resale.
• A branch is a type of wholesaling where the branch directly takes bulk orders from end customers, ensuring supply and reorders.
• Specialized wholesalers focus on wholesaling only specific items.

Retailing

• Includes activities where a retailer buys products from a wholesaler or manufacturer to sell to end users (consumers).
• A retailer makes products available to consumers through various channels, such as brick-and-mortar stores, shopping malls, websites, vending machines, and kiosks.

Levels of Service Provided in Retailing

• Self-service: Customers handle the entire shopping experience except for payment (e.g., vending machines, online platforms, self-checkout kiosks).
• Full-service: Customers receive service from the moment they enter and sometimes even after leaving (e.g., high-end department stores, specialty boutiques, luxury car dealerships).
• Limited service: Stores offer some services provided by full-service stores (e.g., fast-food restaurants where customers order at the counter but eat at the table).
• Mydin: Offers various products at competitive prices with outlets across Malaysia. Provides bulk purchase options for certain items.

Types of Retailers

• Specialty Retailers: Focus on specific product categories or niches and offer a high level of expertise and curated selection (e.g., Apple Stores for electronics, Sephora for cosmetics).
  • Harvey Norman: Offers electronics, home appliances, furniture with multiple locations in Malaysia.
  • Bata: Shoe store with various footwear for men, women, and children across Malaysia.
• Convenience Retailers: Offer a limited selection of everyday items and are typically open for extended hours (e.g., 7-Eleven, Circle K).
  • Petronas Mesra: Convenience stores found at Petronas petrol stations across Malaysia, offering snacks, beverages, and daily essentials.
• Discount Retailers: Offer lower prices by selling lower-cost or off-brand items (e.g., 99 Speedmart, Walmart, Dollar General).

Non-Store Retailing

• Firms sell products without a physical retail store/space.
• Sales occur through online platforms, with delivery to the customer's doorstep.

Types of Non-Store Retailing

• Direct Selling: Sales representatives or consultants sell products directly to consumers through face-to-face interactions, in-home demonstrations, and sales parties (e.g., Amway).
• Telemarketing: Selling products via telephone (e.g., stockbrokers, bankers).
  • Telekom Malaysia (TM): Utilizes telemarketing to promote broadband packages and offer upgrades.
• Online Retailing: Buying and selling products or services over the internet through digital stores or websites (e.g., Lazada).
• Automatic Vending: Dispensing products through vending machines placed in high-traffic areas (e.g., snacks, beverages, coffee).
• Direct Marketing: Reaching out to potential customers directly through marketing campaigns (e.g., email marketing, direct mail, catalogs).
  • AirAsia: Uses direct marketing to send promotional emails and offers to subscribers.

This quiz covers the fundamentals of marketing distribution channels, including exclusive distribution and the various types of intermediaries like agents, wholesalers, and retailers. Understand how companies like Apple and franchises operate within these frameworks to reach consumers effectively.