SEM IIPART I

Marketing Channels and Distribution Decisions In the Sport Industry

Distribution Defined

Distribution is the process of getting the product to the consumer.

A Distribution system is the methods and channels used in delivering products from producer to consumer.

An Intermediary is an individual or organization through which products move from producer to consumer.

Product Types Sports activities are participation products

such as participation in basketball, bowling, scuba, hiking, sky diving, running, weight training, sailing, water skiing, golf, and snow-boarding.

The activities are offered—packaged—to the consumer in a number of ways such as leagues, tournaments, championships, races, meets, regattas, outings, and adventure travel packages.

Sport Business Goods

• Sport Business Services: The cleaning, repair, and maintenance of sports equipment alone makes up an important part of the sport service industry.

• Sports Entertainment: The development of sports as an entertainment product is a fast-growing segment of the sport business industry.

• Sport Media: Some examples of sport media are sports magazines (print), electronic sports businesses (Web-based businesses), and industry trade magazines. The consumers of these can be either end or business consumers.

Distribution of Products Tangible products are physical objects. Most are

manufactured in mass quantities at a factory and must be moved—distributed—to a place of purchase—retailer or wholesaler. For example, running shoes are manufactured in a factory and must be moved to a retailer to be sold.

Intangible products are not physical objects and include products such as services, places, and ideas.

Shelf Life: amount of time that a product can remain in a good and consumable condition after being manufactured.

Time, Place, and Possession UtilityThrough Distribution

Time utility is getting the product to the consumer when the consumer wants it.

Place utility is getting the product to the consumer where the consumer wants it.

Possession utility is creating possession of the product for the consumer.

The Distribution System

Types of Distribution Intermediaries

• Wholesaler—a company that buys goods in large quantities specifically to resell to retailers or final consumers (Peter and Donnelly, 1993).

• Retailer—a company that buys goods to resell to consumers (Peter and Donnelly, 1993).

• E-tailer—an electronic retail store.

The Distribution System (cont’d)

• Agent—a person or a company who “moves” products (facilitates the sale) by taking orders for a buyer and placing the order with the producer (Boone and Kurtz, 1992).

• Mail order—a company that buys direct from a manufacturer or producer and offersthe products through a catalog or electronic system (Cravens and Woodruff, 1986).

• Distributor—a wholesale intermediary (Peter and Donnelly, 1993).

Types of Distribution Intermediaries

Complex Distribution System in the Sport

Industry

The Distribution System (cont’d)• Selection of a Distribution System: The

considerations of the consumer should be the deciding factor in the selection of a distribution system.

• A company should study what the competitors are doing before making any sort of business decision.

• Exclusivity drives up demand, which in turn drives up prices.