Distribution Strategy
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Week 4, Topic 2
November 2012
Distribution Strategy
Joyce Richards
DU
Introduction
By now most of us probably have a pretty good understanding of the first three P’s of the marketing mix—product, promotion, and price (Grewal & Levy, 2011). However, until now, we may not have given the fourth P, place [or placement] much thought. Actually, the third P really doesn’t represent a place, but distribution. Distribution happens behind the scenes and is a very complex function. It involves coordination and cooperation between the intermediary channels and/or organizations through which a product passes to reach the consumer.
Each intermediary (i.e. warehouse firms, wholesalers, banks, retailers, and advertising agencies) performs a specific function that adds value to the product as it moves toward the customer (Grewal & Levy, 2011). Good marketing strategy efficiently and effectively integrates the special functions of each component of the supply chain. That is, the distribution channel should provide cost effective, value-building services (2011).
Marketing is by no means a selfless endeavor. Each partner in the supply channel expects a pre-calculated measure of return for its efforts. Every participant has weighed the benefits against the cost of performing a certain distribution activity. Simply stated, value itself does not come without a price. To move a product from its point of origin to a wide base of customers requires money! Supply chain managers work to ensure that the cost of distribution does not exceed customer demand for a given product. The goal is to keep profits and revenue high relative to cost for all partners in the supply channel. Surely we can understand now why competent distribution management is the single most important link between product origin and sales.
The Case
Organic balsamic vinegar is a special kind of vinegar. It is organic. What does this mean? According to Lallanilla, expert environmental designer...
November 2012
Distribution Strategy
Joyce Richards
DU
Introduction
By now most of us probably have a pretty good understanding of the first three P’s of the marketing mix—product, promotion, and price (Grewal & Levy, 2011). However, until now, we may not have given the fourth P, place [or placement] much thought. Actually, the third P really doesn’t represent a place, but distribution. Distribution happens behind the scenes and is a very complex function. It involves coordination and cooperation between the intermediary channels and/or organizations through which a product passes to reach the consumer.
Each intermediary (i.e. warehouse firms, wholesalers, banks, retailers, and advertising agencies) performs a specific function that adds value to the product as it moves toward the customer (Grewal & Levy, 2011). Good marketing strategy efficiently and effectively integrates the special functions of each component of the supply chain. That is, the distribution channel should provide cost effective, value-building services (2011).
Marketing is by no means a selfless endeavor. Each partner in the supply channel expects a pre-calculated measure of return for its efforts. Every participant has weighed the benefits against the cost of performing a certain distribution activity. Simply stated, value itself does not come without a price. To move a product from its point of origin to a wide base of customers requires money! Supply chain managers work to ensure that the cost of distribution does not exceed customer demand for a given product. The goal is to keep profits and revenue high relative to cost for all partners in the supply channel. Surely we can understand now why competent distribution management is the single most important link between product origin and sales.
The Case
Organic balsamic vinegar is a special kind of vinegar. It is organic. What does this mean? According to Lallanilla, expert environmental designer...