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The marketing mix - place (distribution channels) - Coggle Diagram
The marketing mix - place (distribution channels)
Distribution channels
Customers offered range of channels to purchase offering - with complex set of channel members
Allows organisations to offer as 'value delivery network' - with members providing value through greater efficiency, expertise and reach
Other functions of channel members are:
Information
Promotion
Contact
Matching
Negotiation
Financing
Risk taking
The length of the chain and type of actors within vary
Service distribution's likely to be direct - agents may be used as geographical distances longer
Channel conflict unresolved could damage channel relationships and compromise effectiveness of distribution channel
'Vertical marketing system':
Channel members act as unified system under leadership of 1 channel member on basis of:
Owning other channel members (corporate VMS)
Have contractual arrangements with them (contractual VMS)
Exert control through superior size/power (administered VMS)
Collaborative distribution
Unified channel systems can take place horizontally:
Organisations at same level within channel collaborate to their mutual advantage
They may merge/join together on a temporary basis
Barriers to this collaboration may be entrenched culture, loss of control and sharing of sensitive data
Other types of collaborative distribution are:
Backhaul
Co-loading
Continuous move routing
Physical internet
Multiple distribution channels
Purpose is to service different segments of customers or to offer multiple channel options
Important an offering made according to customers' needs
Choosing the right distribution channel
Influenced by:
Level of service they wish to provide
Size of company
Type of product
Intensive distribution (widespread, convenient locations)
Selective distribution (fewer, selected outlets
Exclusive distribution (one/few exclusive outlets)
Short distribution (perishable products)
Competitors
Environmental factors (STEEPLE)
Causes of conflict may include:
Expectations between channel members are breached
A member acts in its own best interest that threatens interest of other members
Poor performance by a channel member
Conflict between goals
Failure to meet deadlines/targets
Smooth running can happen when policies and procedures are put in place - channel members must comply with laws relating to competition and exclusivity dealing
Exclusive distribution's when manufacturers require distributors to sell only its products
Manufacturers may try to enforce sales territories restrictions that prohibit from selling outside of a designated area
Tying agreements is when a manufacturer ties a distributor to taking more/all its products
Omni-channel world
It's critical to understand the customer journey
At any point the channel of choice may change
Create a message once and make it available in every channel
Optimisation and personalisation are essential