For most markets, the physical and/or psychological distance between manufacturers and end users is such that effective matching of supply and demand requires intermediaries. The need for a distribution network is due to the fact that the manufacturer is unable to assume all the responsibilities and functions arising from the requirements of free exchange in accordance with the expectations potential consumers. Recourse to intermediaries means for firms to lose control over certain elements of the commercialization process.

Therefore, for a company, the choice of a distribution network (distribution channels) is a strategic decision that must be compatible not only with the expectations in the target segment, but also with its own goals. The sequence of solving problems by distribution channels is shown in fig. 1.4.

A distribution network can be defined as a structure formed by partners participating in a competitive exchange process in order to provide goods and services to individual consumers or industrial users. These partners are manufacturers, resellers and end users - buyers. Any sales channel performs a certain set of functions necessary for the exchange.

Sales Functions:

• study of the results of market segmentation and advertising planning;
• conclusion of contracts with consumers or intermediaries;
• Accounting and monitoring of the implementation of contracts;
• Development of a plan for the shipment of goods to customers;
• Definition of sales channels;
• organization of reception, storage, packaging, sorting and shipment of goods to customers;
• Informational, resource and technical support sales of goods;
• · sales promotion;
• establishment feedback with consumers and regulation.

Rice. 1.4

The performance of the considered functions leads to the emergence of commercial distribution flows between the participants in the exchange process, directed in mutually opposite directions. In total, five types of flows can be distinguished in the distribution channel:

• • the flow of ownership: the transfer of ownership of goods from one owner to another;
• physical flow: the sequential physical movement of goods from the manufacturer through intermediaries to the final consumer;
• · order flow: orders coming from buyers and intermediaries and sent to manufacturers;
• · financial flow: various payments, bills, commissions that move from the end user to the manufacturer and intermediaries;
• · the flow of information: this flow is distributed in two directions - information about the market is moving towards the manufacturer, information about the proposed goods on the initiative of the manufacturer and intermediaries are sent towards the market.

Thus, the presence of a distribution channel implies the distribution of functions and flows between the participants in the exchange. The key question in networking is not whether these functions and flows should exist, but rather which of the channel participants will perform them. One can observe great diversity in the distribution of functions not only for different markets, but also within the same market.

The high level of costs constantly encourages businesses to look for better marketing methods. At the same time, it is obvious that sales functions can be transferred, but they cannot be excluded. From the point of view of the firm, the transfer of these functions to intermediaries is justified to the extent that, due to their specialization, they are able to perform them more efficiently and at lower cost than the manufacturer himself. The privileged position of marketers (distributors) in relation to manufacturers is due to five factors:

• Reducing the number of contacts;
• economies of scale;
• reduction of functional discrepancy;
• improvement of the assortment;
• service improvement.

Reducing the number of contacts is ensured by organizing trade through a wholesaler. Let's give an example: a product of this group is produced by 3 manufacturers, and 5 consumers consume it. There are two possible simple circuits sales of goods:

• 1. without intermediaries, directly - each manufacturer is connected with each consumer; the number of connections in such a scheme is equal to the product of the number of manufacturers and the number of consumers, i.e. 3 X 5 = 15;
• 2. through an intermediary - each manufacturer and each consumer is connected only with an intermediary; the number of connections in such a scheme is equal to the sum of the number of producers and the number of consumers, i.e. 3 +5 = 8. Such a marketing scheme, also called centralized, is more effective, as it reduces the number of actions that ensure the coordination of supply and demand.

Economies of scale in marketing operations are obtained by grouping the offers of many manufacturers. An intermediary is capable of performing certain functions to a greater extent than an individual manufacturer. For example, costs sales representative wholesale firms can be distributed among several manufacturers. As a result, the cost of performing the sales function is reduced compared to the option when each manufacturer must have its own sales staff.

Reducing the functional discrepancy between supplies and customers is also ensured by the organization of sales through intermediaries. By purchasing large quantities of goods, ensuring their storage and breaking into small lots, wholesalers and retailers enable manufacturers and consumers to deal with more convenient scales of supply. In the absence of intermediaries, the manufacturer had to produce goods in small batches in order to adapt to the volume of orders coming from individual buyers. In addition, he would be forced to create large reserves. If one organization takes on two different types activities, such as production and marketing, for which the optimal scale is different, it is forced to carry out at least one of these types on a scale that is greater or less than optimal. The consequence of this will be an increase in costs compared to the case when both activities are performed separately at their optimal level.

Improving the range of goods -- one of the requirements of consumers. The assortment offered by the manufacturer is largely determined by the requirements for uniformity in production applied raw materials, technological knowledge, etc., while the range of interest to the buyer is dictated by the situation of consumption and the interchangeability of goods. Typically, consumers need a variety of goods in small quantities, while manufacturers produce a limited set of goods in large quantities. Therefore, the role of intermediaries is to provide a variety of goods so that buyers can purchase several goods in one transaction, saving their time and necessary effort. Similar savings are created for the manufacturer. For example, a firm that specializes in tools of a certain type will not be able to open its own stores unless it begins to offer them a wide range of products that are usually found in stores of this type. Obviously, it is easier for a trader to secure this range by contacting several manufacturers, especially if they are competitors.

Better customer service is provided when an intermediary does it, because he is closer to the buyer, knows better the local conditions and conditions for the use of the goods. It is easier for the intermediary to adapt to local conditions, provide better after-sales service and other services. However, this dominance of intermediaries is not unshakable. In a competitive environment, intermediaries constantly have to improve the quality of services and reduce costs.

Before moving on to listing ways to organize a company's sales network, it is worth first revealing the very concept of sales, its factors, elements, functions and types.

Sales is a key link in marketing and all activities of an enterprise for the creation, production and delivery of goods to the consumer, the main task of which is to return the funds invested in the production of goods and make a profit, or in other words, “the right product in the right place and at the right time”.

The main goal of the company's marketing policy is to ensure the availability of goods for consumers. To achieve it, you need:

Identify the needs of the target market and calculate its capacity;

Determine effective distribution channels;

Bring as much as possible faster goods to consumers.

Factors that justify creating your own distribution network:

· the main consumers are concentrated geographically;

consumers are few and well known;

the product is specialized or is produced according to the specification of the buyer;

there is a need for specialized services;

The cost of a unit of goods is quite high;

The manufacturer has the necessary financial resources.

There are also the main factors affecting the organization of the marketing system itself:

1) product features (type, stage of life cycle);

2) type of consumer;

3) geographical extent of the market.

The concept of sales includes such elements as: transportation, warehousing, storage, refinement, promotion to retail and wholesale trade links, pre-sales preparation and the actual sale.

Sales system - a complex that includes the sales network of the enterprise and those distribution channels that use it to sell goods.

The main elements of the marketing system are:

1. Distribution channel - a defining link in the distribution system of this product, characterizing the features of functioning, conditions and restrictions of marketing activities;

2. Wholesaler (wholesale trader) - a person (enterprise) who purchases significant quantities of goods from various manufacturers and restricts their movement in retail trade;

3. Retailer - a person (enterprise) that directly sells relatively a large number of goods to the final consumer and purchasing goods either from a wholesaler or from a manufacturer;

4. Broker - a reseller who organizes the sale of goods without acquiring ownership;

5. Commission agent - a person who has a warehouse with goods that he sells on his own behalf, but at the expense of the manufacturing enterprise;

6. Wholesale agent - an employee under an agreement with the seller enterprise, conducting operations at its expense, and at the same time, the exclusive right to sell the company's goods in a certain amount can be transferred to him;

7. Consignee - a person who has his own warehouse and goods, but on the basis of a consignment (i.e., the goods are transferred to him for safekeeping by the producer);

8. Sales agent (sales agent) - a person who independently sells the goods of the enterprise to buyers and has a different status: working with restrictions (on a consignment basis), serving only this enterprise or this consumer;

9. Dealer - a common type of sales agent, usually specializing in the sale of durable goods that require a significant amount of service, which the dealer and his assistants usually do not provide.

The functions of the marketing system include:

Formation of a sales strategy;

Choice of distribution channels;

Formation and processing of documentation reflecting consumer orders;

Product packaging;

Formation of batches of goods in accordance with the needs of consumers;

Warehousing of goods before transportation and its necessary completion in warehouses;

Organization of transportation of goods;

Assistance to intermediaries in organizing the effective sale of goods;

Collection and systematization of opinions of final and intermediate consumers about goods and the enterprise.

The organization of the sale of goods to the final consumer can be carried out using:

– offers of goods in a retail trade enterprise (“merchandising”);

– licensed trade (“franchising”);

– direct contacts with the consumer (“direct marketing”).

When planning a sale, the following areas of activity should be provided:

· study of market conditions - is carried out at the general economic, sectoral and market levels on the basis of predictive and analytical approaches;

turnover forecast - assessment of the sale of goods in physical and value terms and the share of the enterprise in the turnover of enterprises operating in this market, which is carried out for various periods and using various methods. Compiled forecasts are used in conducting trading operations, scheduling production and inventory management, substantiating budgets and profits, determining prices, financial costs;

· Preparation financial estimate- correlation of expected sales with the estimated amount of selling expenses and possible profit. The estimates are based on total sales and individual goods;

Establishment of "sales standards" - the definition of specific tasks for sales agents;

· trade reporting - providing information about actual sales and costs, information about new trends in the market;

control criteria.

Types of systems for marketing products are presented below in table. 1

Table 1 - Types of marketing systems for products

Let's consider ways of organizing the company's sales network, which include:

I. Sales of products directly to consumers through their own distribution network.

Advantages of the method:

Access to primary information about needs, preferences, motivation, market development trends, the relationship between supply and demand;

Focused on the sale and marketing of only the company's products;

Accounting and control over the commodity circulation of products, sales volumes, return of goods and its reasons.

II. Sales of products through intermediaries: the company is introduced to new sales markets, since its own system may not yet be created, or it may not have enough capabilities to maintain its own distribution network, or the company is interested in providing the consumer with related services that it is not able to provide on its own. Wholesalers, distributors, dealers, sales and marketing agents, brokers can act as intermediaries.

The high initial costs of maintaining their own distribution network are pushing industrial companies to use various kinds independent intermediaries. The expediency of their use is undeniable when introducing a company into new sales markets, when its own sales system has not yet been created. It is also required in the main market if the network is represented by companies that can compete strongly with the sales divisions of the company, both because of their financial strength and because of good development market and the presence of close contacts with consumers. Establishing links with independent sales organizations can contribute to the displacement of competing firms that cooperate with the same agents on less favorable terms from the market.

III. A mixed marketing system is a method in which a manufacturer uses different methods of selling products (for example, direct and indirect marketing).

PRACTICAL PART

Sales network organization

For most markets, the physical and/or psychological distance between manufacturers and end users is such that effective matching of supply and demand requires intermediaries. The need for a distribution network is due to the fact that the manufacturer is unable to assume all the responsibilities and functions arising from the requirements of free exchange in accordance with the expectations of potential consumers. Recourse to intermediaries means for firms to lose control over certain elements of the commercialization process.

Therefore, for a company, the choice of a distribution network (distribution channels) is a strategic decision that must be compatible not only with the expectations in the target segment, but also with its own goals.

A distribution network can be defined as a structure formed by partners participating in a competitive exchange process in order to provide goods and services to individual consumers or industrial users. These partners are manufacturers, resellers and end users - buyers. Any sales channel performs a certain set of functions necessary for the exchange.

Sales Functions:

studying the results of market segmentation and advertising planning;

conclusion of contracts with consumers or intermediaries;

accounting and control of the implementation of contracts;

development of a plan for the shipment of goods to customers;

definition of sales channels;

organization of reception, storage, packaging, sorting and shipment of goods to customers;

information, resource and technical support for the sale of goods;

sales promotion;

establishing consumer feedback and regulation.

The performance of the considered functions leads to the emergence of commercial distribution flows between the participants in the exchange process, directed in mutually opposite directions. In total, five types of flows can be distinguished in the distribution channel:

the flow of ownership: the transfer of ownership of goods from one owner to another;

physical flow: the sequential physical movement of goods from the manufacturer through intermediaries to the final consumer;

order flow: orders coming from buyers and intermediaries and sent to manufacturers;

financial flow: various payments, bills, commissions that move from the end user to the manufacturer and intermediaries;

the flow of information: this flow is distributed in two directions - information about the market moves towards the manufacturer, information about the goods offered, at the initiative of the manufacturer and intermediaries, is sent towards the market.

Thus, the presence of a distribution channel implies the distribution of functions and flows between the participants in the exchange. The key question in networking is not whether these functions and flows should exist, but rather which of the channel participants will perform them. One can observe great diversity in the distribution of functions not only for different markets, but also within the same market.

The high level of costs constantly encourages businesses to look for better marketing methods. At the same time, it is obvious that sales functions can be transferred, but they cannot be excluded. From the point of view of the firm, the transfer of these functions to intermediaries is justified to the extent that, due to their specialization, they are able to perform them more efficiently and at lower costs than the manufacturer himself. The privileged position of marketers (distributors) in relation to manufacturers is due to five factors:

reduction in the number of contacts;

economies of scale;

reduction of functional discrepancy;

assortment improvement;

service improvement.

Reducing the number of contacts is ensured by organizing trade through a wholesaler. Let's give an example: a product of this group is produced by 3 manufacturers, and 5 consumers consume it. There are two most simple schemes for the sale of goods:

without intermediaries, directly - each manufacturer is connected with each consumer; the number of connections in such a scheme is equal to the product of the number of manufacturers and the number of consumers, i.e. 3 x 5 = 15;

through an intermediary - each manufacturer and each consumer is connected only with an intermediary; the number of connections in such a scheme is equal to the sum of the number of producers and the number of consumers, i.e. 3 +5 = 8. Such a marketing scheme, also called centralized, is more effective, as it reduces the number of actions that ensure the coordination of supply and demand.

Economies of scale in marketing operations are obtained by grouping the offers of many manufacturers. An intermediary is capable of performing certain functions to a greater extent than an individual manufacturer. For example, the costs of a wholesaler's sales representative may be spread over several manufacturers. As a result, the cost of performing the sales function is reduced compared to the option when each manufacturer must have its own sales staff.

Reducing the functional discrepancy between supplies and customers is also ensured by the organization of sales through intermediaries. By purchasing large quantities of goods, ensuring their storage and breaking into small lots, wholesalers and retailers enable manufacturers and consumers to deal with more convenient scales of supply. In the absence of intermediaries, the manufacturer had to produce goods in small batches in order to adapt to the volume of orders coming from individual buyers. In addition, he would be forced to create large reserves. If one organization takes on two different activities, such as production and marketing, for which the optimal scale is different, it is forced to carry out at least one of these activities at a scale that is greater or less than optimal. The consequence of this will be an increase in costs compared to the case when both activities are performed separately at their optimal level.

Improving the range of goods is one of the requirements of consumers. The assortment offered by the manufacturer is largely determined by the requirements of uniformity in production, the raw materials used, technological knowledge, etc., while the assortment that interests the buyer is dictated by the situation of consumption and the interchangeability of goods. Typically, consumers need a variety of goods in small quantities, while manufacturers produce a limited set of goods in large quantities. Therefore, the role of intermediaries is to provide a variety of goods so that buyers can purchase several goods in one transaction, saving their time and necessary effort. Similar savings are created for the manufacturer. For example, a firm that specializes in tools of a certain type will not be able to open its own stores unless it begins to offer them a wide range of products that are usually found in stores of this type. Obviously, it is easier for a trader to secure this range by contacting several manufacturers, especially if they are competitors.

Better customer service is provided when an intermediary does it, because he is closer to the buyer, knows better the local conditions and conditions for the use of the goods. It is easier for the intermediary to adapt to local conditions, provide better after-sales service and other services. However, this dominance of intermediaries is not unshakable. In a competitive environment, intermediaries constantly have to improve the quality of services and reduce costs.

Producing a product in a buyer's market is half the battle. The manufacturer must also take care that the goods reach the consumer as quickly as possible, since the latter, in the absence of a shortage, tends to minimize his costs of finding the right product.

The marketing system has developed specific concepts for designating its activities, let's dwell on some of them

Sales network- this is a structure formed by partners participating in the process of competitive exchange in order to provide goods and services at the disposal of consumers.

Sales channel- this is an organization (individual people) involved in the movement and exchange of goods, their activities are characterized by their own functions, conditions and restrictions.

Any sales channel performs the following functions:

Transportation.

Dividing a large batch into smaller ones.

Storage.

Sorting (creating sets of specializing and complementary).

Establishing contacts with numerous and remote consumer groups.

Informing (knowledge of market consumers and conditions of competitive exchange).

Sales- this is transportation, warehousing, refinement, promotion, pre-sale preparation and sale of goods.

Sale- this is a personal communication between the seller and the buyer, aimed at making a profit from the sale and requiring knowledge, skills and a certain level of sales competence.

The main participants in the distribution channel are:

wholesaler (wholesaler) is a person ( individual) or an enterprise that purchases a significant amount of goods from manufacturers and organizes either their movement to retail trade or direct sale to the consumer.

Retailer is a person (enterprise) who directly sells a relatively large amount of goods to the final consumer

Broker - this is a person who sells goods without acquiring ownership, but only bringing the seller and the buyer together and receiving a commission from the transaction.

commission agent - this is a person who has a warehouse with goods that he sells on his own behalf, but at the expense of the company that produces these goods.

wholesale agent - a person who works under a contract with the manufacturer and conducts operations at his expense, who is not the owner of the goods.

Consignee - a person who has his own warehouse and goods that are transferred to him by the manufacturer for safekeeping under consignment terms.

Trading agent - a person who sells goods to customers on his own.

Dealer - is an independent small entrepreneur, usually specializing in the sale of durable goods (cars, tractors, agricultural machinery) that require significant service.

Sales representatives work through certain sales organizations:

commodity exchange - is a permanent and organized wholesale market, which trades in large masses of homogeneous goods that can be standardized.

Trading house - a large wholesale and retail company, also operating in the areas of production and finance.

In contrast to the commodity exchange, trading houses are more adapted to conducting transactions with non-standardized consumer goods (clothes, household appliances, electronics).