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About Controlling Product Distribution

You can structure and track the distribution of a wide range of products to large numbers of accounts. In addition, you can control where the product is held in the premises of an account.

Your company can control product distribution in the following ways:

• Managing distribution lists to automate product distribution. By assigning distribution codes to categories, products, and accounts in a customer's product distribution account hierarchy, you build a distribution system that determines the products that are distributed to each account. For more overview information about distribution lists, see About Distribution Lists.
• Classifying accounts by market segment. Classifying an account's market segment automates the product distribution process by controlling the products (or product categories) that appear in that account's product catalog. You classify the market segments for your customer accounts by applying the personalization attribute Account Channel for each account. For more overview information about account market segments, see About Account Market Segments.
• Assigning product categories to an account. Administrators or end users can manually assign specific product categories to specific accounts so that only products in those categories are available for distribution.
• Creating buying groups. Buying groups are accounts that act as product distributors, or suppliers, to multiple member accounts. For more overview information about buying groups, see About Buying Groups.
• Designating merchandising locations. You can assign multiple merchandising locations to an account.

NOTE:  For information that is specific to product distribution and its relationship to sales volume planning, see Sales Volume Planning.

About Distribution Lists

Most consumer goods companies are organized in a hierarchical structure, often based on the company's channels of distribution. Typically, marketing administrators create product distribution lists that control the company products that are available for distribution to their customer distributor accounts and the retail outlets that they serve.

The Siebel Consumer Goods application can use distribution codes to automatically create an account-product record, which is a distribution list of the products that each account (in the product distribution account hierarchy) is authorized to receive. You can apply distribution codes to the appropriate level of the product distribution account hierarchy for each of your customers, usually to the customer's distribution centers and to the outlets that they serve, and to any or all of the products that your company manufactures. Each subaccount receives the full set or a subset of products that are authorized for the key distributor accounts directly above that subaccount in the hierarchy.

Most consumer goods companies use one or both of the following distribution methods to supply their retail outlets:

• Direct distribution. With this distribution method, the key account, usually the customer's own distribution center, is the sole intermediary between your company and the retail outlets.
• Indirect distribution. With this distribution method, another intermediary such as a third-party distributor, called an indirect account, exists between the key account and the retail outlets.

Retail product authorization is when your company's products are authorized for retail distribution at the key account, indirect account, and retail outlet levels. With indirect distribution, distribution lists are built from the products available to the indirect account. These products are a subset of the products from the key account distribution list.

For more information about creating distribution lists to control product distribution to accounts, see Creating Distribution Lists.

About Account Market Segments

If you have multiple channel partners operating in the same locale, such as a shopping mall, you might want them to carry different sets of products to avoid unnecessary price reductions that erode the brand equity of your products. Companies in this situation determine the product mix that an account carries based on the market segment of the account.

In the Siebel Consumer Goods application, you can use the Account Channel attribute to selectively display an account catalog with only the product categories and products that fit the account's market segment.

Administrators or account managers can tag your company's accounts with the Account Channel attribute, which determines to which type of distribution channel the account belongs, such as Mass Merchandiser or Electronics Specialists.

About Buying Groups

A buying group is an account (consisting of multiple member accounts) that buys products at high volume, typically for the purpose of receiving discounted prices. All stores in a buying group can benefit by receiving products at prices lower than they receive if they purchase independently.

You can associate specific products with a buying group to determine the products available for distribution to the group members. Buying groups can purchase products on behalf of their member accounts. End users can check to see if their buying group plans to purchase some of the products they require and, if it does, they can remove those products from the plan and eliminate double ordering.