Question

This week we will discuss the aspects of distribution when launching your new V Fusion. See this link https://www.campbells.com/v8/ for more information.

As you consider distribution, address the following items:

Is distribution an important element of the marketing mix?

What value does it add to the product?

Describe one of the three major distribution strategies with an example.

Discuss whether that strategy is successful including your rationale.

Provide a real life example of channel conflict and discuss why the conflict may exist.

Answer 1

Distribution is an important element of the marketing mix.It addresses the below mentioned issues :

• Availability : Distribution makes the product available to the consumers from the point of production at the right time,right place and to the right person.
• Accessibility : Distribution makes the product accessible by making it available to the nearby location of the consumer.
• Stocking the inventory : The role of distribution is tostock the inventory and make it available to the consumers.
• Gathering information : Distribution channel partner also collects the information and feedback from the consumers and make it available to the manufacturers.
• Contacting : Distribution channel partners contact the prospective buyers and communicate them about the product.
• Negotiating :They also negotiate the price with the customers.
• Financing : They also make the easy finance option available to the cutomers to make them purchase the product.
• Risk Taking : Distribution channel partners take the risk of stocking the product.
• Bulk Breaking : product is sent in large quantity by the producer.It is the role of the distribution channelpartner to break it in small quantities for the convenience of the customer.

There are majorly three distribution strategies :

Intensive Distribution Strategy : In this case the product is available at each and every nook and corner of the city in order to make it available to the cutomers intensively. For FMCG products,this strategy is very effective as there are no brand loyal customers, so they want the products to be available everywhere.

Exclusive Distribution strategy: Products like Lamborghini cars are available in very rare stores like one in 3 to 4 regions.

Selective Distribution strategy : Products like Zara are available in selected stores may be in few of the stores.

Intensive distribution strategy is very successful as the FMCG products should be easily available and thus consumers can purchase it easily at any point of time.

Channel conflict :Conflict arising between the channelpartners or between the manufacturer and the channel partner is called as channel conflict.

It can arise due to any of the reasons:

Difference in goals between manufacturer and channel partner : Dealers want to earn maximum profit margin by charging high price and manufacturers want high market penetration by charging low price.

Unclear Roles and Rights : For example Johnson&Johnson had a conflict with the channel partner as the territories assigned to the channel partners were not clear and thus each partner was entering into each other's territory.