...Effect of Channels of Distribution on the Sales of a Product CHAPTER ONE Introduction 1.1 Background to the Study Most producers do not sell their goods directly to the final users between them stands a set of intermediaries performing a variety of functions. The process of distribution of goods involves all human and physical means which aid the smooth transfer of such good from the manufacturer to the final consumer. Nickeil (1998) The growing of distribution is a key strategy variable in marketing management. In deed, if one look at the major strategy of the marketing mix – product, price, promotion and distribution, the greatest potential for achieving a competitive advantage now lines in distribution. Distribution still offers a new frontier for competing usefully especially if the emphasis is placed on the design and management of superior marketing channel systems to provide excellent customer services. Yet design optimal marketing channel system to boost sales, formulating innovative distribution strategies and management channels system effectively is no simple task. To day, companies are faced with choice of distribution path or strategy that will make product readily available to potential customers. Achumba (1994). Also the need for other institutions or intermediaries in the delivery of good is sometime questioned, particularly since the profits they make are viewed as adding to the cost of product which may eventually slow down sales of the product...
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...users between them stands a set of intermediaries performing a variety of functions. The process of distribution of goods involves all human and physical means which aid the smooth transfer of such good from the manufacturer to the final consumer. Nickeil (1998) The growing of distribution is a key strategy variable in marketing management. In deed, if one look at the major strategy of the marketing mix – product, price, promotion and distribution, the greatest potential for achieving a competitive advantage now lines in distribution. Distribution still offers a new frontier for competing usefully especially if the emphasis is placed on the design and management of superior marketing channel systems to provide excellent customer services. Yet design optimal marketing channel system to boost sales, formulating innovative distribution strategies and management channels system effectively is no simple task. To day, companies are faced with choice of distribution path or strategy that will make product readily available to potential customers. Achumba (1994). Also the need for other institutions or intermediaries in the delivery of good is sometime questioned, particularly since the profits they make are viewed as adding to the cost of product which may eventually slow down sales of the product. The concept of distribution refers to where and how product and services to be offered for sale and all essential mechanism and logistical supports for the transfer of goods and services as well...
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...Analyze the Effects of Channel Management by Ian Linton, Demand Media Definition of 'Distribution Management' Overseeing the movement of goods from supplier or manufacturer to point of sale. Distribution management is an overarching term that refers to numerous activities and processes such as packaging, inventory, warehousing, supply chain and logistics. Effective distribution channel management can improve sales and customer satisfaction. Related Articles * Channel Management Techniques * What Is a Marketing Channel or Channel of Distribution? * How to Write a Marketing Distribution Channel Strategy * Distribution Channel Selection Factors * How to Analyze the Code of Ethics of an Organization * How to Build a Text Distribution List on Your iPhone Channel management is a technique for selecting the most efficient channels or routes to market for your products and services, and deriving the best results from those channels by applying appropriate financial, marketing or training resources. Channels to market include such distribution methods as direct sales from a website, sales force or call center and indirect sales through distributors or retailers. You analyze the effects of channel management by measuring factors such as changes in your share of the market or the volume of sales via certain channels, the changing costs of going to market through certain channels, and varying levels of customer satisfaction achieved by certain channels. Ads...
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...The Effects Of Channels Of Distribution On Nigerian Product Sales Mrs. R.N. Obaji, University Of Lagos, Nigeria ABSTRACT This study investigated the effects of channels of distribution in a selected Nigerian manufacturing company as it affects sales of its product. The quantitative research method was the instrument used to collect data for the study. A total of 300 copies of the questionnaires were distributed to sampled consumers, distributors and marketing staff of the company, out of which 200 copies was retrieved back. The data was analyzed using the Statistical Package for Social Science (SPSS) version 15 and the t-Test statistical tool was employed to test the significance between the observed variables and the underlying construct. The findings revealed that the involvement of channels of distribution affects sales of product and that consumers prefer to buy from intermediaries than from producer channels. Based on the underlying assumption, the following were recommended for the study; that the channel members should influence several key decisions such as customer service, delivery, and maintain inventory control and the company should give adequate promotional support to the intermediaries, improve on delivery terms and also evaluate channel members regularly. Keywords: Channels of Distribution; channel members INTRODUCTION M arketing Channel decisions are among the most important decisions that management faces today. Indeed, if one look at the...
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...MANAGING CHANNEL MEMBER BEHAVIOUR A project for Sales and Distribution Management Submitted to Prof. Jaideep Mukherjee Submitted By: Group No. 19 Renuka Dabas (Roll No. 11PT2-59) Sonali Jethi (Roll No. 11PT2-65) TABLE OF CONTENTS S. No. | Title | Page No. | 1 | Introduction | 3 | 2 | Channel Conflicts | 3 | 3 | Causes of Channel Conflict | 4 | 4 | Effects of channel conflict | 5 | 5 | Types of Conflicts | 5 | 6 | Minimizing and Managing Channel Conflict | 7 | 7 | Channel conflict or Channel Choice | 8 | 8 | Distributor Sales Force Motivation/Channel Member motivation | 8 | 9 | Training of Distributor Sales Force | 10 | 10 | References | 13 | Introduction A distribution channel or 'route-to-market' is a 'path' or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them flow in the opposite direction (from consumer to the vendor). Most products are purchased from channel intermediaries whose main purpose is to deliver product from the manufacturers to the end users. The purpose of a channel intermediary is to move products to consumers, whether business or consumer. Channel intermediaries consist of wholesalers, agents or brokers, distributors, dealers, retailers. Channel members can have transactional function, logistical function, inventory storage function or a facilitating function. Channel intermediaries are extremely important in the chain of delivering...
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...[Type the company name] | Marketing channels | 81,105, 117, 93, 69 | | [Type the author name] | 9/21/2010 | Marketing channel: A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user Channel level: A layers of intermediaries that the perform some work in bringing the product and its ownership closer to the final buyer. Channel conflict: Disagreement among marketing channel members. Vertical marketing system :A distribution channel structure in which producer wholsers , and retailers act as a unified system one channel members owns the others ,has contracts with them or has so much power that they all cooperate Future vertical marketing system divided in to two .They are 1.conventional marketing system 2.vertical marketing system Vertical marketing system: A vertical marketing system comprises of the producer, wholesaler and retailer acting as a unified system. One channel member, the channel captain owns the members and has so much power that they all cooperate. It arose as a result of strong channel member’s attempts to control channel behaviour. There are three types of VMS: CORPORATE, ADMINISTERED AND CONTRACTUAL. CORPORATE VMS: A corporate VMS combines successive stages of production and distribution under single ownership. For example Sears obtains over 50% of the goods it sells from companies that it partly or wholly owns. ADMINISTERED VMS: ...
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...factors before releasing their products to consumers. Identification of threats and opportunities in a business environment forms the most vital issues that promote a successful marketing plan. Below is a market analysis of Samsung smart phones from the manufacturers to end users. The analysis uses direct distribution channel as the best distribution strategy for Samsung smart phones. In addition, a multi-channel distribution system was recommended that utilized only the catalogue and the sales force. The target market needs identified indicated that most Smartphone users demand the android operating system, and are very sensitive to original products from Samsung thus validating the direct distribution channel. Introduction In order to effectively sell their products, marketers must consider a number of factors that contribute to a perfect marketing and distribution plan. Some of the vital things to consider while marketing a product include the distribution channels to adopt, the target market needs and its effect on the chosen distribution channel, and the type of channel member to use, whether a retailer, wholesaler, manufacturer, or a dealer. According to Kotler & Armstrong (2001, p. 15), marketers should have the ability to identify threats and opportunities within a business environment in order to develop a perfect and successful marketing plan. The following discussion provides a deep analysis on how an entrepreneur can market a product and make it available to the...
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...various goods and services to satisfy those needs most effectively. So the businessman needs to: (a) produce or manufacture the product according to consumers’ need; (b) make available it at a price that the consumers’ find reasonable; (c) supply the product to the consumers at different outlets they can conveniently approach; and (d) inform the consumers about the product and its characteristics through the media they have access to. So the marketing manager concentrates on four major decision areas while planning the marketing activities, namely, (i) products, (ii) price, (iii) place (distribution) and (iv) promotion. These 4 ‘P’s are called as elements of marketing and together they constitute the marketing mix. All these are inter-related because a decision in one area affects decisions in other areas. In this lesson you will learn about the basic aspects relating to these 4‘P’s viz., product, price, place and promotion. OBJECTIVES After studying this lesson, you will be able to : • • • • • • • • explain the concept of marketing mix and its components; explain the meaning of product and its classification; state the various factors affecting pricing decisions; describe different methods of pricing; state the meaning of channels of distribution; identify the various channels of distribution; state the factors affecting choice of a channel of distribution; and explain the concepts of promotion and promotion mix. 101 Business Studies MODULE -5 Marketing 20.1 CONCEPT...
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...delivery of product(s) to consumers so that their needs are fulfilled and organisational objectives are also achieved. This involves several important decisions, e.g. deciding about the product or products which should be offered for sale, price of the product, markets where products may sell and the means of communication with the consumer for the sale of the product. All these decisions form part of marketing-mix. In this lesson we shall study about the concept of marketing mix, its components and the relationship among various components of marketing mix. 22.2 Objectives After studying this lesson, you will be able to : explain the concept and characteristics of marketing mix; describe various components of marketing-mix; establish the relationship amongst various components. 22.3 Concept and Characteristics of Marketing Mix The process of marketing or distribution of goods require particular attention of management of business because production has no relevance unless products are sold. Marketing mix, simply stated, is the process 20:: Business Studies of designing and integrating various elements of marketing in such a way as to ensure the achievement of enterprise objectives. The elements of marketing mix have been classified under four heads - product, price, place and promotion. That is why marketing mix is said to be a combination of 4 P’s. Decisions relating to the product include product designing, packaging and labelling and varieties of the product. Decision...
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... The implementation of a distribution strategy without the coordination of other components of the marketing mix tends to produce a strategy without harmony. A disjointed marketing strategy will not reach the success levels that were expected. Organizations have come to realise the impact of distribution management as a source of competitive advantage with companies like Delta, Lobels and Bakers Inn employing distribution managers and personnel. This is because it has become more difficult to find a unique source of competitive advantage in an era where it is easy to copy strategies and products. Marketing managers are now looking to coordinate the promotion strategy with the distribution strategy, specifically push or pull strategy in relation to distribution strategies that include, intensive, selective or exclusive. Now the combination of these strategies is most important in an environment where the retailer and other relevant intermediaries are faced with so many product options to stock on their floor space. It then becomes apparent that the marketing manger that is able to gain the best and most floor space using one strategy, and persuade end customers to seek out and purchase the organization’s products in another strategy, becomes successful in gaining market share and meeting their objectives. This paper will define distribution management and its components. It will look at the impact of the Bullwhip Effect or the Forrester Effect, the push and pull strategies...
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...Distribution and Channel Management MT211 The main aim of my essay is to show my understanding of the main principles and concepts of distribution and channel management through the use of notes on Moodle, information I gathered from attending lectures and also from literature that I have read on this topic. The Supply Chain is the sequence of suppliers that contribute to the creation and delivery of a good or service to end customers, meanwhile Supply Chain Management is organizing the cost effective flow and storage of materials, in-process inventory, finished goods and related information from point of origin to point of consumption to satisfy customer requirements. A major element of the supply chain is the use of logistics which is the management of the storage and flow of goods, services and information throughout your organisation. Logistics can be broken down into three major elements, Firstly, materials management which is the sourcing and receiving of raw materials or unfinished products for subsequent use. Secondly, material flow system which can be defined as the ability to locate and schedule material through to end production and disposition, and finally the physical distribution which is the delivery of finished goods to customers. The main aim of a supply chain management is to evolve a company’s supply chain into an optimally efficient, customer-satisfying process, where the effectiveness of the whole supply chain is more important than the effectiveness of...
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...Tesla Distribution Plan Students Name University Affiliation Tesla Distribution Plan Recall, the primary objective of the marketing plan is to get the general public to purchase our products or services. Distribution talks about the location tactics and possible strategies we would use to sell your product (Edmunds& Demand media, n.d.). The distribution unit of a marketing plan consists of a review of where our competition is selling, where our target clienteles like to buy, the effect that selling at a certain place has on our brand, and our distribution channel alternatives and the effects that these channels will have on our costs, sales volumes and profit margins. Where we sell, our product can affect the brand identity, conveying a message to our customers centered on what they think of the retailer selling our product. The Sales and Distribution sector of the marketing plan analyzes how this will happen. The correct distribution strategy will drive our business growth. Working with companies and sales agents with reputable customers, for instance, is a brilliant way to expand into new markets where the price would otherwise limit our ability to grasp clients. An operative distribution strategy will allow us to maximize profits and use our sales channels effectively. Concentrating on a small number of sales channels allows us to invest in each one and build strong associations with crucial intermediaries. A tactical approach to distribution will also ascertain conflicts...
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...the products 4.0 Analysis and mapping of the products with models 5.0 Comparison of product, pricing, promotional and placing strategies 6.0 Types of disagreement between the competitor A and the channel distribution 7.0 Channel strategy factors 8.0 Conclusion and Recommendations 9.0 References 1.0 Executive Summary Today’s business world has become much competitive that requires continuous and visible effort to get and retain customers. Companies are increasing focus on sales and marketing. Businesses need to decide which customers to target. Businesses need to work out how they will reach and win new customers. Businesses need to make sure that they keep existing customers happy. And they need to keep reviewing and improving everything in order to stay ahead of the competition. Therefore businesses need to develop appropriate marketing strategies which allow them to move forward. This is a marketing strategy report. First part will identify and explain the best analysis for two competing cosmetic brands (Competitor A and B) which consists of eight products from four product lines. In this section SWOT analyses of two competitors’ product lines will be given. Second part will analyse and map those products with aid of product life cycle and BCG matrix. These models will be discussed briefly with justifications. Third section will talk about the best product, pricing, promotional and placing strategies for each and every type of products in both...
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...Komatsu’s Strategy of Distribution Channels in China ——Take Komatsu Excavators as an Example Sufang Zhang School of Economics and Management, Northern China Electric Power University #2 Beinong Road Deshengmenwai, Beijing 100022, China E-mail: zsf69826313@sina.com.cn Chenwei Fu School of Economics and Management, Northern China Electric Power University #2 Beinong Road Deshengmenwai, Beijing 100022, China E-mail: chin_hans@yahoo.com.cn Abstract Selection and management of distribution channels are not only part of management functions and daily operation of multinational corporations (MNCs), but also important compositions of core capability and competitive advantages. This paper first analyzes Komatsu, a well-known Japanese company’s strategy of distribution channel of excavators in China from the perspective of distribution channel intensity, then it discusses market function positioning of Komatsu’s distributors and Komatsu’s control of its distribution channels. Thirdly the paper summarizes characteristics of Komatsu’s distribution channels and conduct theoretical thinking on the strategy of distribution channels of MNCs. Finally it suggests that Chinese enterprises learn from the successful experience of Komatsu. Keywords: MNCs, Komatsu, Excavators, Distribution Channel 1. Introduction Nowadays, the competition of MNCs in the global market focuses on two areas: one is the field of product research and development; the other is the field of product distribution. The former is to...
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...own-label products to fashion forward twenty-something through the website, Asos.com. On Asos.com there are 9,000 products available at any one time, with 450 new fashion items added every week. These include women’s fashion, menswear, accessories, jewelry and beauty products. Asos.com attracts 6 million unique shoppers every month and has more that 2 million registered users. This report is examining Asos.com through their marketing mix and the external environment that may effects the industry, in order to select the most appropriate mix for the organization. Moreover, we monitor the performance of the organization’s products and services in order to determine which components should be tested. Finally, we adjust components of the marketing mix in response to test results. Component of the Marketing Mix Key characteristics of products and services Products can be physical goods or services or a combination of both. For Asos.com, their main products include women’s fashion menswear, accessories, jewellery and beauty products. They have also recently introduced a new line of children clothes that is known as little ASOS. Here are some key characteristics of product of Asos.com: * Brand: Asos.com sells over 850 brands as well as its own range of clothing and accessories. This enables it to provide well-known brands such as Levis and Adidas, which appeal to s target market. * Range of product line: Asos.com offers over 50,000 branded and own-label product lines the...
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