Stores vary in size, in the kinds of services that are provided, in the assortment of merchandise they carry, and in many other respects. The organisation must distribute the product to the user at the right place at the right time. Through the use of the right place, a company can increase sales and maintain these over a longer period of time. An agent never actually gains ownership of the product and usually make money from commissions and fees paid for their services. It is how a company gets its products or services to the consumers. At the strategic level, there are three broad approaches to distribution, namely mass, selective or exclusive distribution. The wholesaler assists the producer by making products more accessible to buyers.
The overall approach to distributing products or services depends on a number of factors including the type of product, especially perishability; the market served; the geographic scope of operations and the firm's overall mission and vision. You have beautifully explained the distribution system at coca cola and the best part is how they have reached the remote areas of the world. Such retailers would rather buy from local distributors who have lenient credit terms and offer a wide assortment of merchandise. The firm should monitor the channel's performance over time and modify the channel to enhance performance. It represents the level of international availability selected for a particular product by the marketer; the level of intensity chosen will depend upon factor such as the production capacity, the size of the target market, pricing and promotion policies and the amount of product service required by the end-user. Although they have seen some failures through re-branding or re-positioning of their brand ,but because of their distribution network they have overcome all those hurdles and enjoying the dominance in many countries. While it is generally perceived that Coca-Cola runs all its operations globally it, this process it done through various local channels.
The requirement would be selling Coca-Cola drinks in there, but no Pepsi. They have so many different channels that sell coke products, that each channel must have its own dedicated method. Selective distribution requires companies take an active role in vetting and deciding on appropriate retailers. It still however, owns the brand and is responsible for consumer brand marketing initiative. This flow is typically represented as being manufacturer to retailer to consumer, but may involve other types of intermediaries. In certain specialist markets, agents or brokers may become involved in the marketing channel. The next ones are early adopters.
While a company may in fact have a core or target consumer base in mind, the business will also make it a point to sell its products in venues that are frequented by consumers other than that. A marketing channel is the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. Direct distribution and indirect distribution Indirect Distribution Indirect distribution involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer. With intensive distribution, the focus is not necessarily on targeting specific consumer for the purpose of deciding where to distribute those products. This alternative is the middle path approach to distribution. A direct distribution channel is used to sell products directly to consumers with no intermediaries. Disposable goods or those of everyday use do not require too many special channels.
These intermediaries are third party companies that act as wholesalers, transporters, retailers and provide warehouse facilities. Determining whether or not an intensive distribution strategy is the best strategy to employ is often dependent on factors such as organizational resources or the availability of retail locations. Exclusive distribution is defined as selling through only a few retailers. But in actual practice it may not make business sense for a company to set up its own distribution operation. For instance, the lumber manufacturer sells lumber to the furniture maker, who then makes the furniture and sells it to retail stores, who then sell it to the final customer. When conducting a marketing analysis, it is important to take a look at this segment to ensure that you are using the right channels to get your product to your buyers. Impact of Promotion Issues The nature of the product also has an impact on the type of promotions required to sell it.
As they mature, such as supermarkets, schools, markets, Coca-Cola in the region and gradually establish a corresponding professional services team. Manufacturers use an intensive distribution strategy with products that need to be quickly replenished. Children are the target market for toys. This is ideal for differentiated organizations with a strong brand and a desire for scarcity. There are four main types of intermediaries: 1.
But for a car, there needs to be extensive salesperson and user interaction. Without a well-laid distribution plan, no product or service reaches the desired customer. The more locations that carry a product, the more opportunities there are for manufacturers to make money. In other cases, distribution systems can become quite complex involving many levels and different types of intermediaries. Their customers are usually another intermediary such as a retailer. Retailers Stores vary in size, in the kinds of services that are provided, in the assortment of merchandise they carry, and in many other respects. At the same time, Coca-Cola also continue to study the use of new channels of different regions and important channels of different periods, professional service team to improve the level of customer service terminal.
The other three elements of the are , , and. However, marketers need to be alert to channel switching because of its potential to erode market share. An example of would be the sale of vehicles through exclusive dealers. The Company manufactures and sells concentrates, beverage bases and syrups to bottling operators. A wholesaler normally does not sell to other wholesalers.
There are two channels of distribution available to firms. For example, a logging company needs a distribution system to connect it with the lumber manufacturer who makes wood for buildings and furniture. . Wholesalers can provide warehousing, inventory control and order processing, transportation, information, and selling functions. It is best that we first identify the traits of the ultimate user, since the results of this evaluation might determine the other channel institutions we would use to meet these needs.