SDM/U4 Topic 2 Supply side channel analysis, Channel flow and efficiency analysis, Channel structure and intensity analysis
Marketing Distribution channel is actually one slice of the overall marketing pie chart. By the help of distribution channels a company makes its products or services available to the consumers. Distribution channel plays a vital role in a company’s overall marketing strategy. This is also a part of the “Four Ps” of marketing i.e. product, promotion, price and placement or distribution. This is obligatory to take a look at this segment while conducting a marketing analysis, to ensure that your company is using the right channels to make available your product to your customers.
There are many distributions and a particular company can choose one or more according to their requirements. Some major distributions channels include wholesalers, catalog sales, e-commerce websites, consultants, a direct sales force who usually sell over the phone, dealers, home shopping networks, retailers and more. The selected distribution channels may dictate what the rest of the marketing strategy would be, as they influence the company’s buyer directly. Advertising, promotions and other marketing methods would then appeal to the buyer’s demographic. So every company either operating at small or large scale must perform a keen and careful market analysis to determine which distribution channel is best suited for their product distribution.
Optimized distribution strategy can be a powerful growth driver for your company. Marketing analysis begins with an analysis of company’s distribution channels and a comprehensive analysis of the entire market distribution system. The final result will help in creation of strategic distribution plan, or a plan for the optimal product distribution strategy. Market analysis will help to determine the target demographic and demand for your products or services. This will also help to know about company’s competitors and their distribution channels. Market analysis determines competitive pricing for the products and the best distribution channels.
After passing through this phase only then companies can create their marketing strategy based on the information gained by market analysis. Conducting regular marketing analysis will also help the company to figure out whether their marketing strategies are working or whether they need to reconsider how they are promoting the products or services.
Marketing and Distribution
Suppose a company design a strong advertising campaign as well as do best promotional activities but, company won’t get the product bought if company’s products are being sold or distributed in the wrong place. For example, a company that makes socks and leather jackets that has its store in a warm locale probably won’t sale many products because the demand of their product isn’t there. So companies must match distribution channel against its buyers. Companies should determine where their customers are, and then they need to make sure to have their distribution channel flow directly in demanding location.
Selecting the Best Channel
All successful companies should also take into consideration that how their customers want to receive their designed products or offered services. Do they want to make an online purchase, do they want to talk with a direct sales agent or browse in a store? After determining this, then companies need to figure out whether to sell directly or through a marketing intermediary such as wholesalers or retailers by estimating which one would bring most profit for company. Companies can do this by using market information that shows the number of potential sales, as well as price per product and the cost of distribution.