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The Marketing Mix - Place/Distribution Channels Reading 7 - Coggle Diagram
The Marketing Mix - Place/Distribution Channels Reading 7
Distribution channels
Customers are typically offered a range of channels through which to purchase an offering
Channel members = suppliers, distributors - value delivery network
Channel members functions
Information about other stakeholders and forces in the marketing environment - can help with strategic planning
Promotion
Contact with potential buyers or consumers and can influence their purchase decisions
Matching products with consumers
Negotiation on price or terms
Financing channel distribution
Risk taking
Traditional distribution
Manufacturer
Wholesaler
Retailer
Consumer
Vertical marketing system
Manufacturer
Wholesaler
Retailer
Consumer
Channel members act as a unified system under the leadership of one channel member on the basis of owning the other channel members, having contractual arrangements with them or exerting control over them through superior size or power
Collaborative distribution
Hauliers or shippers who share shipment or lorry capacity, transport planning and warehousing to reduce duplication and costs
Unified channel systems can also take place horizontally, where organisations at the same level with a distribution channel collaborate to their mutual advantage
Several types of collaborative distribution:
Back haul - sharing opposite routes to fill empty capacity
Co-loading - sharing capacity in the same direction to fill up loads
Continuous move routing - replacing separate shipments with multi-stop trips
Physical internet - shared network based on an interconnected logistics system of shared facilities for transporting and storing freight
Multiple distribution channels
Many orgs have multiple distribution channels either to service different segments of consumers and buyers through different channels or to offer them multiple channel options through which to buy
Choosing the right distribution channel
Organisations distribution objectives and choices may be influenced by:
The level of service they wish to provide
The size of the company which affects how much of the distribution it can provide itself
The size of product: convenience products typically use intensive distribution; widespread, convenient locations, shopping products tend to use selective distribution; through fewer selected outlets, speciality products typically favour exclusive distribution; through one or only a few exclusive outlets, perishable products may need to have short distribution designs
Competitors
Environmental factors (STEEPLE)