Manufacturers, dealers, wholesalers, retailers and customers alike may interact with more than type of channel. These are dual or multiple distribution systems.
Planning a Channel Strategy
- Channel Objectives – How can online distribution work with other elements of the marketing mix to increase profits? To increase market share? To increase the volume of sales? In general the overall objective of any distribution channel planning is to make the firm’s product available when, where, and in the quantities customers want and need at a minimum cost.
- Evaluating the Environment – After setting the distribution objectives, marketers must consider their internal and external environments. The organization must examine such issues as its own ability to create distribution channels, what channel intermediaries are available, the ability of customers to access these intermediaries and how the competition distributes its products. Sometimes, to ensure customers’ undivided attention, a firm sells its products in outlets that don’t carry the competitor’s products. Finally, by studying competitors’ distribution strategies, marketers can learn from their successes and failures.
- Choosing a Distribution System
Conventional Marketing Systems
A multiple level distribution channel in which members work independently of one another. Their relationships are limited to simply buying and selling from one another. Each firm seeks to benefit with little concern for other channel members. Even though channel members work independently, most conventional channels are highly successful. For one thing, all members of the channel are working for the same goals – to build demand, reduce cost, and improve customer satisfaction. And the channel members know that it’s in everyone.
