• Thu. Feb 25th, 2021

[Music] when determining through which channels to place or sell a product or service we talked about using distribution strategy however before we start let us just list the learning goals for this video the goal is to understand what distribution strategy is why we need to know about it and how we could go about using it we will do this through establishing a general understanding of the actual purpose of distribution strategy and look at what might impact the success of our distribution channel choice we will also provide an overview of some additional available tools and theories that we as marketers can use when determining the channel choice of a product or a service so let's start [Music] what is the purpose of distribution strategy and what is the connection to the rest of the marketing mix when you are asked to design the marketing mix you need to make decisions on four or seven core elements also known as the four of the seven P's first of all any issues concerning the product this would include packaging and all other elements in connection with the products secondly a decision on price [Music] thirdly you will need to decide on the place which is what this video will address we will also need to make a plan of which promotional activities we will carry out in order to tell our customers about our products and encourage them to buy if we're dealing with an offering that is better described as a service or perhaps a product that includes large elements of service we might also want to look at the additional three piece the people that are involved in delivering the service the process that our customers will go through in order to receive our service and the physical evidence any visible or tangible elements that the customer will see here point other ways experience when receiving the service none of the four or the 7ps should be decided on in isolation however place is the P which we will focus on in this video so why is it important to make sure we choose the right distribution channels let us use an example this business produces French cakes and desserts in these modern production facilities well-educated confectioner's develop recipes and create delicious cakes and desserts ready to be sold and distributed to cake loving customers what will impact the success of the chosen distribution channels and subsequently which considerations are relevant when making their choice of distribution set up let us imagine that they had the idea of selling their cakes and desserts in rural areas through roadside self-service booths while customers were expected to show up and purchase the products without any assistance in this case we could argue that they should first of all have considered some market factors firstly what is the location and concentration of their customers is it likely that they will be able to sell to a suitable amount of customers with this kind of setup secondly do their customers expect to buy these types of cakes and desserts at roadside booths if not it could be a challenge to convince them of the value in doing so thirdly we would advise them to consider whether the customers would be able to get the information and service expected when using this type of setup our recommendation for French cakes corporation would amongst other factors depend on their answers to these questions about market factors let us imagine another scenario where French cakes are considering establishing a chain of French cakes cafes through which they will sell their cakes and desserts in addition to the market factors which we have already discussed we as marketers would also advise them to consider some factors about themselves firstly do they have the required resources to undertake such an investment regarding both time money and people secondly what level of control do they desire from their distribution channel owning the distribution channel gives ultimate control but it comes at a price thirdly we might discuss with them whether their product range is wide enough to meet customers needs so our recommendations for this company would amongst other factors also depend on their answers to these questions about themselves we could also imagine that the company were keen on creating an online web shop where their customers could order their cakes and desserts and get them delivered directly to their homes in addition to the market and producer factors which we have already discussed we would also advise them to consider some factors about the actual products firstly does the perishability the fairly short shelf life of a cake of desert suit this type of distribution would they be able to deliver the product while it's still edible would there be ways of overcoming this obstacle secondly our cakes and desserts suitable for handling in this way and thirdly with other types of products complexity could be an issue so our recommendation for this company would in addition to the factors already discussed also depend on the answers to the questions about the actual products we might also imagine that the company is keen on distributing their products through supermarkets in order to reach a large number of people from their target group in this way in addition to the previously discussed factors we would also ask them to consider some facts about their competitors firstly which channels are their competitors using and secondly is it possible to achieve differentiation through choice of channel let us imagine that in one particular supermarket chain consumers are not exposed to the competitors cakes of desserts distributing the products through this chain would therefore enable them to differentiate from the competition and ultimately have a better chance of selling their products to the end consumers so our recommendation for French cakes corporation would in addition to the other already mentioned factors also depend on their answers to these questions about the competitors so when advising the company on their choice of distribution channels we would look at some market factors some factors about the French cakes corporation itself factors about the products and some factors in connection with a competitive situation and finally we would look at the rest of the marketing mix to ensure that the choice of place corresponds with how French cakes cooperation wishes to be positioned in the minds of the customers we have now established the purpose of distribution strategy what it is and why we need to know about it and we have established that there are many factors which we need to look at before we can decide on the best place to distribute our product or service so let's move on in addition to the factors we have just discussed we as marketers have some additional tools and theories we can use to guide us when determining which distribution channels to use these will not be described in detail in this video but let us just introduce an overview of some of the tools and theories we might want to use we would determine whether we're dealing with consumer b2b and/or services distribution channels distribution intensity should be looked at to what extent and in which context do we want our product or service to be available to the end consumers thirdly we would consider whether to use independent intermediaries setting up a franchise operation or perhaps go for channel ownership we should also look at the physical distribution system which would include decisions on transportation of goods inventory issues and order processing procedures if we're dealing with retail we could also look at the process of retail differentiation finally we should also look at how we could manage the relationships with our chosen distribution channels so that it remains prosperous for both us and for the from parties within the channel we have now established an understanding of the purpose of distribution strategy the different factors that impacts our choice and lastly we have presented an overview of some additional tools and theories available to us when determining a suitable place to distribute our product or service to learn more about distribution strategy and how to use the different tools and theories introduced in this video I recommend that you read chapter 17 in David Jabba and Fiona in this Chadwicks principle and practice of marketing management – seventh edition my name is Tina Wade thank you for watching [Music]

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