Distrubition Channel Article Review

Distribution Channel Article Review

MKT/421

Distribution Channel Article Review

Introduction

A firm must understand how to effectively distribute products in order to ensure that they always reach the hands of its intended consumers. Thus, marketing distribution channels, promotional strategies, and digital marketing technologies are vital concepts to ascertain. Identifying the targeted market may reveal the need for diverse distribution channels. Within, this paper I will define what a distribution channel is and discuss why it is important to the marketing process. Next, describe the differences between direct and indirect distribution channels, introduce my selected article, and compare and contrast similarities and differences with distribution strategies for online versus brick and mortar businesses.

Distribution Channel/ Importance

A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. Distribution channels can include wholesalers, retailers, distributors and the internet. Distribution channels are important because they assist consumers to find the products and services that they need, they are the connecting link between producers and consumers; they make time and create resources by closing the gaps in between.

Compare & Contrast Direct and Indirect Distribution Channels

A direct distribution channel is organized and managed by the firm itself. Firms that use direct distribution require their own logistics teams and transport vehicles. Direct channels also tend to be more expensive to start running and can sometimes require significant capital investment. The most challenging part of indirect distribution channels is that another party has to be entrusted with the manufacturer’s products and customer interaction, relying on intermediaries to perform most or all distribution functions. However, the most successful logistics companies are experts at delivering receivables in a way that most manufacturers cannot be. Indirect channels also free the manufacturer from any startup cost. With the right relationship, some would say that they are much simpler to manage than direct distribution channels. They also have to set up relationships with third-party selling systems.

Selected Article

The article that I selected from our university library is titled Channel Choice in the 21st Century: The Hidden Role of Distribution Services (2016), the author of this article is Roger R. Betancourt. This article’s core messages are about distribution services, online and offline retailing, channel choice and management.

Compare and contrast similarities and differences in distribution strategies for online versus brick and mortar businesses

When it comes to various distribution strategies used in this case comparing the online platform to Brick and mortar businesses, by brick and mortar we refer to the firms that own retail stores, warehouses as well as factory production facilities and might as well offer to them the option to lease. Some of the similarities in these two types include:

A)  They both have similar needs in aiming at promoting the given company, for example, a company working as a brick and mortar establishment will be required to achieve high sales through reaching out to majority customers and so is the case for online businesses in that they also aim at making great sales realized through internet marketing.

B)  They both get to come up with innovative strategies now and then so as to maintain a good customer base and achieve their market targets.

C)  They both get to have the need to identify with their target customers so as to see into it that they reach out to these potential clients. 

Differences in online versus brick and mortar businesses include:

A)  Online businesses require low startup cost unlike the brick and mortar businesses; this is because for instance in brick and mortar stores massive amounts are needed for rents and employee maintenance as well. Unlike online firms that getting a simple website requires little amount while on the other hand, online platforms such as eBay might come in handy.

B)  With online businesses, you can work in the comfort of your home, unlike brick and mortar that require a location based working on a daily basis to see into it that your goals as a company get achieved.

The company I chose to provide an example for is Amazon. Com because they specialize in offering great deals on returned, warehouse-damaged, used, refurbished or new products.  Additionally, people love the convenience of online shopping, because they can make a purchase in seconds from the comfort of their own home. Thus, this also means no more waiting in long lines, ultimately providing some with one less thing to do on their list. However, there are certain in-store experiences that we just cannot get from online shopping. For instance, clothing can’t be tried on prior to purchase and toys can’t be felt for durability. On the other hand, brick-and-mortar stores may not offer the seemingly endless selection that online retailers do. Additionally, their reliance on foot traffic and word-of-mouth to drum up business may put them at a disadvantage. Despite these benefits and drawbacks, both types of store are valued and may be chosen for different reasons. In addition, one of the largest drivers for in-store shopping is the ability for customers to receive their products immediately. This was until eCommerce sites could find a less expensive solution for same-day or 1day delivery. However, beautiful storefronts and point-of-purchase displays can strongly influence customers, along with the personal connection with store employees, a well-executed store atmosphere, and the ability to touch and hold products before purchase. When considering all of these aspects either method can get then job done.

Recommendations

The distribution strategy that I would recommend to Amazon would be to employ the use of CRM to assist with analyzing its customers buying behaviors, and based upon their preferences solicit them with like items and discounts towards future purchases. 

Conclusion

The decisions regarding the distribution of goods and services requires some strategic decision making. Hence, a well-planned distribution channel system is a key component of the marketing mix that helps meet customer demands and achieve company goals. All this information is needed in order to control the product and service flow from production to the end consumer. Furthermore, if distribution channels are absent the whole process of promotion and marketing are sabotaged, and a business can fail.

References

Importance of Distribution Channels (2017). From Distribution Decisions Tutorial. KnowThis.com. Retrieved June 29, 2017 from https://www.knowthis.com/distribution-decisions/importance-of-distribution-channels.
Betancourt. R, R. (2016). Channel Choice in the 21st Century: The Hidden Role of Distribution Services. Retrieved from: https://doi.org/10.1016/j.intmar.2015.09.002

Yu, Kangkang, Jack Cadeaux, and Hua Song. “Distribution Channel Network and Relational Performance: The Intervening Mechanism of Adaptive Distribution Flexibility”. Decision Sciences 44.5 (2013): 915-950. Web.