Monday, October 29, 2012

Product/Service Distribution Channel Strategies in Marketing

Whether you're selling a service or a product, you need to figure out a way to get it to the customer. Sure, you need to first determine where the customer is and which distribution channel to follow, but after that comes the decision about your 'distribution strategy'.

"Isn't it odd that you don't address the strategy before everything else?"

Not really, because the strategy only pertains to the distribution channel.

Here are three options for you:

Intensive distribution

Aim - make it convenient for the masses to buy your stuff.

Place your good/service in as many places as possible so they are readily accessible. Fast moving consumer goods, like:
  • Bubblegum - to chew and stick in your sister's hair
  • Pencils - for gardening in your petite lawn
  • Milk - to compensate for the country-wide cow strike
  • Eggs - to splatter all over your kitchen floor so you can enjoy cleaning it with detergent
  • Detergent - to clean up the eggs, and
  • Toothpastes - if you're into hygiene and all.
Selective distribution

Aim - make it convenient for a smaller group of people to buy your stuff.

Based on the optimal profitability of each outlet, you select a handful of retail outlets or merchandisers to sell your good/service. For certain commodities, it is simply not economical to sell them at every store round the corner. Examples of these include:
  • Electronic appliances
  • Clothes
  • Shoes
  • Sports goods, etc.
You not only need to form relationships with these outlets, but also need to ensure the salesmen are specialized enough to advise customers about these products:

    'Sir, why don't you buy this 62 inch LED television for your bathroom! It's the ideal size!'

Extensive distribution

Aim - make it inconvenient for the masses.

Just a couple of outlets across the city are chosen to sell your branded goods/service to an exclusive set of loyal customers. Your franchise location is chosen carefully to ensure your clients accept the inconvenience of travelling to the spot, and don't mind paying higher prices either. This includes items such as:
  • Heavy appliances
  • Designer furniture
  • Cars
  • Branded clothing items and jewelry.
Now you know which distribution channel strategy is best for your business. It may not be the only success factor but getting distribution channel decisions right makes sure the ideal customer comes along to make a purchase. At the end of the day, it can make a difference to your sales figures.

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