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What factors are considered for designing channels of distribution for industrial and consumer product?
Factors to Consider in Designing Marketing Channels. Strategic Factors
Category: Marketing
The three sets of factors illustrated in the figure below have to be evaluated simultaneously when designing marketing channels. All three sets interact and so the design process is necessarily interactive.
Strategic Factors
Product positioning is so fundamental to marketing strategy that it naturally occurs as a basic element in channel design. Its influence is related to how the positioning is defined. If the positioning emphasises a product or service feature then the channel chosen would have to support and perhaps enhance that position. Claims such as 'instant access' 'guaranteed freshness' 'the full service company', 'the one with the widest product line', 'top technical back up', or 'buy with confidence - life time care warranty', all impose strictures on channel options if they are to be credible. If the positioning is related to particular users or use occasions then again the channel choice needs to be consonant. If the position taken relies upon competitive positioning head on or side step it must be influenced by the channel choices of competitors. With head on competitive positioning it would follow that channel design mirrors that of the competitors. With side step competitive positioning a deliberate decision to employ distinctive channels might be more supportive.
Intensity of market coverage intended by the firm will be one of the outcomes of the product positioning strategy. This intensity is dependent upon the decision made about product or service availability to buyers Intensive coverage implies numerous outlets or service points. Selective coverage implies far fewer and this might be taken as far as implying an exclusive franchise for one outlet or service point in an area or region. To reinforce a high quality image the firm may decide to restrict availability. Rolls Royce or BMW cars cannot be bought at just any car showroom. Ercol, G-Plan or Nathan furniture is only available at restricted outlets though frequently together. Many expensive kinds or clothing or jewellery are similarly restricted. The opposite approach is apparent for goods and services with a high purchase frequency, which people wish to buy with minimum effort such as groceries or petrol or fast food. An important consideration in this decision is the trade-off between market exposure and control over the channel. Wide availability in numerous outlets reduces the seller's control but restricted availability limits potential sales.
This trade off between exposure and control is illustrated in the figure below:
Remember as well that the extent to which the channel is integrated vertically, also determines the degree of market control available.
Thus two important strategic considerations impacting upon overall channel
control are:
- Degree of vertical integration
- Intensity of exposure
See the figure below:
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What is an example of a conventional distribution channel?
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What system provides the force and channels for the distribution of blood?
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What is the history of distribution channels in Nigeria?
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What are nestles distribution channels?
Physical Distribution
How does one manage relations in different distribution channels?
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What has the author William Montgomery Diamond written?
William Montgomery Diamond has written: 'Distribution channels for industrial goods' -- subject(s): Marketing, Lending library
What are the roles of distribution channels in marketing of products?
describe the types of distribution channels that can be use in the marketing of a product or service
Types of distribution channels in rural marketing?
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What channels of distribution used by Cadbury?
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What is channel distribution?
Channels of distribution means the units a product goes through, from a manufacturer to a customer. Usually through every channel or unit the product goes through, the cost of the product is raised by the organization as profit to itself. By zero channels of distribution this means the product goes from the producer- customer directly By 1 channels of distribution means the product goes from maybe the producer-retailer- customer By 2 channels of distribution the product goes from producer- agent- retailer- customer By 3 channels of distribution the product goes from producer- agent- wholesaler- retailer- customer
What are the factors that affect distribution channels in marketing?
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What are the factors affecting distribution channels in marketing?
There are many factors that affect distribution channels, the main factors that affect distribution channels are transport, taxes, expenses, licences that countries are bound to have if the goods are being distributed abroad, Time delays due to weather conditions and etc..
How are diamonds involved in trade?
Diamonds are products and are traded internationally through the distribution channels for diamonds. This is true whether the diamonds are industrial -- about 80% of all diamonds mined, or gem-quality stones.
