Question

Apple has used multiple channels to distribute its range of Airpod headphones in the past. Given that marketers seek to exceed customer service expectations at a price that ensures profits and positive cash flow, what distribution related trade-offs do you think the company should consider when evaluating its current distribution strategy?

Answer 1

Trade-off in distribution means if one distribution channel or system is beneficial, the other must be non-beneficial.

Distribution related trade-offs are as below:

No.1) Wholesale distribution is better than direct selling by the company: if this trade-off is there (suppose whole distribution passes distribution risk and uncertainty from the company to wholesaler), the strategy of wholesale distribution should be taken.

No.2) Retail distribution is better than wholesale distribution: if this trade-off happens (suppose retail distribution saves cost of product, since the number of intermediary reduces), the strategy of retail distribution should be taken if the company has warehouse facility.

No.3) Direct selling is better than any other distribution channel: this trade-off indicates that the company has own distribution facilities (like showroom, door to door selling, and captive distribution); therefore, own distribution is better than any other way of distribution since it gives competitive price and market attachment.