Business — Banking — Management — Marketing & Sales

Distribution Management

Category: Marketing

Decisions about how to distribute products and services to consumers are among the most important facing marketing management. These marketing channel decisions directly affect every other marketing decision. The firms pricing will to a large extent be determined by whether it uses mass merchandisers or high quality specialty stores. Overall sales and advertising strategy will be affected by the choice of middlemen used in the channel (if any) and the extent to which they need persuasion training and motivation. Whether a company proceeds with launching a new product or acquiring new products may depend upon how well the new proposals fit the abilities and capacity of channel members.

Marketing channels are needed so that products can reach buyers and so that buyers can reach service points. They bridge the gap between production and consumption and in doing so add value to the products or service by making them available when required. The particular channel arrangement adopted by an organization expresses much about its search for competitive advantage, and is a central aspect of its marketing strategy.

Kotler and Armstrong (1991) provide a useful definition of a distribution channel:

«A distribution channel is the set of firms and individuals that take title or assist in transferring title, to a good or service as it moves from the producer to the final consumer or industrial user».

A British marketing professor puts the importance of distribution into perspective when he says:

«It is sometimes suggested that the role of distribution and customer service is to provide time and place utility in the transfer of goods and services between buyer and seller. Put another way there is no value in a product or service until it is in the hands of the customer or consumer.»

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