Name – Abhishek Ghartan
Student id – 215152804
Username – avi1108
According to Hollensen (2015), Marketing involves the selling and promoting the products. Before one jumps into the business it is mandatory that he decide what to sell and where to sell. He added that the planners chalk out the necessary plans to form a network of firms through which the distribution of the product takes place. Let us discuss about the effective distribution channels in detail.
Rosenbloom (2012) opined that distribution of products is always the creation of space and time utility. Products should reach at the right place, at the right time and in the proper condition. Otherwise, it fails to satisfy the customers. Basically, it is a process through which the products are transferred from the producers to the customers. According to Iacobucci D (2014), a distribution channel involves the following members:
Iacobucci D (2014) stated that, before the products are reached to consumers, wholesalers and retailers play the role of the intermediaries who carry the products. The manufacturers are the ones who make the products. Then the wholesalers buy it in large quantities and sell it to the retailers in small quantities. Iacobucci D (2014) added that in many instances, the manufacturers have given the wholesalers the responsibility to transfer goods to the retailers. Rushton et al (2014) opined that another vital task of the wholesaler is to store the large amount of goods to a particular place before they sell it to the retailers. On the other hand, the retailer buys the products from the wholesalers and makes it available for the customers. For example- the manufacturer of the Pixar sells the products to the retailers, i.e. the local movie theatres and then only the customers get it. Oppewal et al (2013) opined that this network of channels might involve another intermediary in the network who transfers the goods from the manufacturers to the wholesalers. They are called the agents. During the customer’s emergency, the agents play a crucial role. They added that it depends on both the nature of the product and the placement of the product to determine the best way to distribute it. Therefore, the planner should consider the following issues before he designs the distribution process. These are as following:
- Consider the importance of convenience
- Consider the cost trade-off and customer service
- Evaluate the major channels of distribution including the number, types, terms and responsibilities.
Although the placement of the products is the primary consideration during the distribution channel designing, the marketers need to check the other elements in the marketing mix strategy. These are the price, product, and promotion. Consideration of these parameters helps the planner to design the channel effectively. He can do the planning in various ways. According to Dawson (2014), the categories are:
- Intensive distribution
- Selective distribution
- exclusive distribution
Through the intensive distribution system easily transported and inexpensive products are widely distributed. He opined that the marketers use the pull strategy to promote these products directly to the end customers so that they get the product easily. Most of the snack food items are distributed by using Intensive distribution system. While selling the expensive products including cars and appliances, the marketers use the push strategy. As discussed by Wilkinson (2013), it is a limited or selective distribution process. Here the manufacturer exercises his control over the products. However, they impose most control over the products in case of Exclusive distribution. Marketers willing to sell expensive Rolex products use this strategy.
Multiple ways and channels also give birth to situations of conflict. Be it the manufacturer, the wholesaler, or the retailer, whoever is large in size, tries to exercise his power over the other members. Undoubtedly, the domination often leads to resentment and lack of cooperation. This is a reason of the collapse in the system. However, these conflicts can be resolved if the businesspersons try to make communication process transparent because it builds trust among the members .It is important to know the others’ perspectives and for that, they should exchange the personnel for a better understanding. However, third parties can do negotiations. They are the one who understands both and takes the decision neutrally.
With the increase of demands and expansion of global market, the distribution system has changed a lot. Online distribution is the best example of it. Nowadays, the decision-makers taking considering the speed and efficiency level of online distribution and they are taking decisions according to that. The advantages of online distributions are- improved communication among the channel members, instant service, cheaper channels, and long-term relationship building with the members. Thus, the products can reach at distant places in shorter time.