Question

For those who agreed that "Channels of Distribution may be the best opportunity for a sustained competitive advantage," HOW do you suppose that a good channel can provide the marketer that competitive advantage? What has to happen inside the channel to make it all 'worthwhile' and to give a marketer that competitive advantage to which we have some caveats above??

Answer 1

Answer:-

I agree that channels of distribution may be the best opportunity for a sustained competitive advantage due to below reasons:

1. Channels of distribution: can be defined as a set of sources through which the end product reaches the customers. It can be through sources like Wholesalers, Retailers, distributors or event direct selling through different modes.

2. Reach: Even the best of products does not shine in the market if it does not have a proper channel of distribution. Channel of distribution gives competitive advantage through visibility for the product. The product will be higher reach than the competitors while using an effective channel of distribution

3. Cost effective: When cost-effective channels of distribution are chosen by the manufacturers, they tend to be always ahead of their competitors. This can be achieved through low cost and high revenue.

4. Selection: Selection of a good channel is a major challenge for any marketer. For different products, the channel of distribution is different to attain the competitive advantage. Hence a thorough market analysis has to be made before selection of channels.

5. Benefits for manufacturer by using good channels can be as below

- Logistics would be completely taken care without any hassle

- The line of distribution would be more instead of direct selling

- using the intermediaries’ customer is a major benefit for the manufacturers

- selling small quantities directly by the manufacturers can be avoided and hence saves cost