Reference no: EM133384626

Assignment:

Topic 1. What are the determinants in choosing distribution channel designs and objectives

According to Kotler and Keller (2012), a marketer utilizes distribution channels to exhibit, sell, or deliver the physical product or service(s) to the buyer or user. "These channels may be direct via the Internet, mail, mobile phone or telephone, or indirect with distributors, wholesalers, retailers, and agents as intermediaries" (Kotler & Keller, 2012, p. 13). Equally, Mullins and Walker; Jr. (2013) stated that the significance of good distribution decisions in designing a marketing plan is that customers won't purchase goods or services except it is readily accessible when and where they want to buy them.

"An effective distribution channel makes the right quantities of the right product available in the right place at the right time to satisfy the target customer" (Mullins & Walker; Jr., 2013, p. 309). It also cuts the amount expended on product acquisition and marketing. Thus, a company must design a distribution channel that connects the firm's marketing strategy with the needs of its target market, which considers the number of middlemen (including retailers, merchant wholesalers, nonstore retailing, etc.) that should be included channel (Mulani, n.d). According to Mullins and Walker; Jr. (2013), the objectives of a manager in designing a distribution channel are to:

• Increase the availability of the good or service to potential customers,
• Satisfy customer requirements by providing high levels of service,
• Ensure promotional efforts,
• Obtain timely and detailed market information,
• Increase cost-effectiveness, and
• Maintain flexibility

Several determinants influence the choice of a distribution channel design and objectives, as stated by (Kotler & Keller, 2012; Mullins & Walker; Jr., 2013), including:

• Product characteristics: The nature of the product, its packaging, the level of customer support required, price, weight, standardization, etc., will all play a role in determining the most appropriate distribution channel.
• Market features: The size and distribution of the target market, the level of competition, and the needs, location, and preferences of the target customers will all impact the choice of distribution channel.
• Company competencies: The size, resources, financial position, volume of production, and goals of the company will influence the type of distribution channels it can support and its ability to control and manage those channels effectively.
• Channel intermediaries: The availability and capability of intermediaries such as wholesalers, retailers, and distributors will play a role in determining the most appropriate distribution channel design.
• Legal and regulatory environment: Laws and regulations regarding distribution channels can impact the design and objectives of a distribution strategy.
• Technology: Advances in technology, such as e-commerce, can provide new opportunities for distribution and impact the design and objectives of a distribution strategy.

Thus, the choice of distribution channel largely relies on the exclusive integration of these determinants and the specific goals and objectives of the company (Mullins & Walker; Jr., 2013; Mulani, n.d). However, a distribution manager may make adjustments or review a distribution channel as required, especially when the product has been stabilized.

References

Kotler, P., & Keller, K. L. (2012). Marketing Management 14th ed. New Jersey: Prentice Hall.

Mulani, V. (n.d). Distribution Channels: Meaning, Functions, Factors, Types, Choice and Selection.

Mullins, J. W., & Walker; Jr., O. C. (2013). Marketing Management: A Strategic Decision-Making Approach 8th. New York: McGraw-Hill Higher.