Wednesday, November 10, 2010

Distribution (Customer Convenience)

Decisions with respect to distribution channel focus on making the product available in adequate quantities at places where customers are normally expected to shop for them to satisfy their needs. The aim of the management is also to keep the physical distribution costs (that would include inventory, transportation, and storage) as low as possible. 

Depending on the nature of the product, marketing management decides to put into place an exclusive, selective, or intensive network of distribution, while selecting the appropriate dealers or wholesalers. The right choice of these factors can give a company some competitive advantage. For example, a low-priced product consumed regularly on an ongoing basis should be available at as many outlets as possible (intensive distribution) otherwise consumers would buy any other substitutes that are more conveniently available. 

On the other hand, for purchasing products such as CTV, washing machine, computer, or other similar durable items, consumers don’t mind visiting some selected dealers (selective distribution), and for high-end, very expensive items such as Mercedes Benz cars, expensive and exclusive jewellery status watches and accessories, etc., customers are quite willing to visit exclusive dealerships, even if there are just one or two in the city (exclusive distribution).