Developing Your Marketing Strategy- Part 3/4

Please Click For; Developing Your Marketing Strategy-  Part 2/4

TC YEDİTEPE UNIVERSITY INSTITUTE OF GRADUATE STUDIES IN SOCIAL SCIENCES PH.D. IN BUSINESS ADMINISTRATION PROGRAM

BUSS 611- Advanced Seminar in Strategic Management and Corporate Governance / Spring 2015

STRATEGIC MANAGEMENT TOOLS & TECHNIQUES:

Developing Your Marketing Strategy-  Part 3/4

Channels of Distributions

Decision of Distribution Channels and system include the wholesale and retail channels through which company’s product and services move to the ultimate users. Place of the marketing mix includes;

  • Numbers and types of middleman and decision of channels
  • Locations and Availability
  • Inventory levels
  • Transportation

The primary components of any distribution system would include direct sales teams, sales agents, distributors and retail dealers. In some markets retail outlets are often franchised. Electronic commerce also is an emerging channel for market distribution.

1

Distribution Strategies

Depending on the type of product being distributed there are three common distribution strategies available:

1-Intensive distribution used commonly to distribute low priced or impulse purchases products. This strategy is common for snacks, soft drinks and juices, foods, basic supplies, magazines. Intensive distributors work with many manufacturers and generally sell high volumes of goods at lesser prices and earn lower margins.

Pros Cons
  • Increased sales
  • Wider customer recognition
  • Impulse buying
  • Characteristically low price
  • Low-margin products that require a fast turnover
  • Difficult to control large number of retailer

2-Exclusive Distribution involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers. Exclusive distributors usually cover designer ware, major domestic appliances, and the most luxurious items & brands like Gucci, Prada.

Pros Cons
  • More control over the market
  • More aggressive middleman
  • High brand loyalty
  • Difficult to maintain a high level of brand image
  • Betting on one dealer in each market
  • Only suitable for high priced & low volume products

3-Selective Distribution; A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread. Product distribution here basically considers high-end items such as prestige or designer goods e.g. Puma, Fila, Nike, and Adidas.

Pros Cons
  • Save expenses
  • Improve marketing efficiency
  • ·Control the marketing
  • Difficult to attain a variety of business objectives in relaxed conditions of the marketing environment
  • Lack of adaptability to goods that are not selective
  • A certain risk as firm has to provide more services to selected middle men

 Please Click For; Developing Your Marketing Strategy-  Part 4/4

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