Distribution strategies

Distribution is a set of “things” you have to do and operation you have to make in order to make sure that your product or services arrives to the place or consumer that will consume.

The distribution channel is the “road” through which products and services circulate from its creation in the origin to the arrival of the consumer.

There are different commercial structures that have different characteristics. Depending on what your product is and what your strategy is you would need to choose the correct distribution. Depending on your positioning, its attributes, the needs your product satisfy.

Different types of distribution channels

  1. Mega-supermarket
  2. Supermarket
  3. Branded shop
  4. Local shop
  5. Home delivery

Different types of characteristics

  1. Capacity to Customer Care
  2. Logistic costs
  3. Consumer effort
  4. Customer time

Depending on what product/service you sell you will have to find the optimal distribution channel. But it depends on what characteristics you are covering. Example high-value products don’t have to worry about low-cost logistic because you have margin to work with the delivery, but if you have a low-cost product you need to focus on finding delivery that matches your product.

The product can therefore be sold through:

  • direct selling (channel)
  • retailer – consumer
  • wholesaler – retailer – audience
  • franchising

Different types of integration

  • horizontal integration
  • vertical integration (cooperatives, banks in order to control quality and price) are normally contractual

setting up a distribution channel

Depending how “complex” your product is (does it need to be explained?) and how targeted your audience is (if you know exactly who your target is you don´t need long channel chains but if it`s mass market you need to be everywhere and then you need long indirect channel chains)

  1. Taking decisions about the “length” needed of the channels
    a) direct channels (Dell)
    b) short indirect channels (a car)
    c) long indirect channels (Coke-Cole)
  2. Decisions about the coverage of the channels
    a) intensive distribution (e.g. a medical brand)
    b) selective distribution (e.g. scisors)
    c) exclusive distribution (e.g. Mango)
  3. Review:
    a) the companies objectives
    b) the marketing objectives
    d) distribution objectives
    e) analyse characteristics of the product
    f) identify possible channels
    g) value your distribution channel

 

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