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Intro to Marketing
Mr. Bernstein
Distribution and the
Entertainment Industry
December 4-6, 2013
Intro to Marketing
Mr. Bernstein
Distribution Channels
Consumer Product Channel Types (Glencoe p 450)
Producer directly to Consumer
Producer to Retailer to Consumer
Producer to Wholesaler to Retailer to Consumer
Producer to Agents to Wholesaler to Retailer to
Consumer
Producer to Agents to Retailer to Consumer
Q: examples of each?
Industrial Product Channel Types – see p 451
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Intro to Marketing
Mr. Bernstein
Distribution Intensity
Exclusive distribution
Selective distribution
Intensive distribution
Based on control of selling, costs, brand image,
accessibility, locations
Q: Examples of levels of Intensity?
Legal and Ethical Issues in Distribution
Clayton Act of 1914 prevents exclusivity which lessens
competition
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Intro to Marketing
Mr. Bernstein
The Distribution Environment
Managing distribution is a strategic decision. Example:
ST Microelectronics
Life in the distribution channel: In all industries,
distributors face pressure from both customers and
vendors
Relationships with partners in the channel can be critical
Understand the entire channel from producer to
consumer
Understand who has the leverage – who is adding most
value? Are there competitive alternatives?
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Intro to Marketing
Mr. Bernstein
Entertainment Profits: The Movie Business
In 1998, despite record attendance, only 2 of the 7
major Hollywood studios was “profitable”
Production and distribution costs are high
Predicting moviegoer preferences is difficult
A major contribution to revenues are licensing of
the intellectual properties – cable TV, DVDs, video
games, theme parks, etc.
Sequels and prequels reduce risk
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Intro to Marketing
Mr. Bernstein
Distribution of Entertainment
Which have you used recently?
Cable
Satellite TV
Internet
On Demand
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Intro to Marketing
Mr. Bernstein
Distribution of Entertainment
What companies are in the value chain between the
film producer and the paying customer?
(Read How Movie Distribution Works, Introduction
only)
What value does each add, in terms of the 4 P’s?
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