Distribution Strategies

Date: 2015-10-07; view: 492.

Place

This refers to how an organisation will distribute the product or service they are offering to the end user. The organisation must distribute the product to the user at the right place at the right time. Two types of channel of distribution methods are available. 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. Direct distribution involves distributing direct from a manufacturer to the consumer. The advantage of direct distribution is that it gives a manufacturer complete control over their product.

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 purchase products (e.g. chocolates, soft drinks).

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.

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.

If a manufacturer decides to adopt an exclusive or selective strategy they should select an intermediary which has experience of handling similar products, credible and is known by the target audience.

The "seven Ps" is a marketing model that adds to the aforementioned four Ps, including "physical evidence", "people", and "process". It is used when the relevant product is a service, not merely a physical good.

Physical evidence. The evidence which shows that a service was performed, such as the delivery packaging for the item delivered by a delivery service, or a scar left by a surgeon. This reminds or reassures the consumer that the service took place, positively or negatively.

People. The employees that execute the service, chiefly concerning the manner and skill in which they do so.

Process.The processes and systems within the organization that affect the execution of its service, such as job queuing or query handling.

Created in 1993 by Robert Lauterborn, the Four C's is an updated classification system of the Four P's. His model shifts the focus from the producer to the consumer and is a better blueprint to follow for smaller businesses that are marketing to a niche audience.