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Any enterprise operating in different market areas pursues a single important goal. It remains significant for both a manufacturer and a mediator to bring goods and services to end consumers. In order to meet these needs, they should choose the right strategy of distribution. Basically, the distribution of goods comes a long way from a producer to a final consumer. If a company decides to turn to intermediaries, it means that it loses control of its product and the merchandising expenditure. On the other hand, opportunities of selling it become more expanded. Proper and effective distribution management allows making profit and improving company’s competitiveness, taking into account pros and cons of distribution approach.
Expensive Distribution Strategy
The distribution of a new exclusive and expensive shampoo can be carried out via an exclusive distribution approach. Consequently, the manufacturer will limit the number of resellers and provide them with the exclusive right to sell the product, while rejecting the sale of goods of competing companies. It allows the manufacturer to control the marketing of direct selling and indirect intermediaries and to require them to comply with pricing policies, promotion, and service. This right is usually applied to a specific region. Dealers are made a condition to reject selling products of competitors. Direct selling will contribute to immediate distribution by the manufacturer that will mean steady presentation of the quality product to the end customer. Indirect selling will be applied in the case of entry into distant and international markets. Therefore, direct and indirect selling will be selected depending on the place and condition of distribution (Richardson & Gosnay, 2010).
The pros of exclusive distribution are a high level of customer service, sales control, and the focus on target customers with a high level of income. An additional pro is the desire of the shampoo manufacturer to insure itself in case of the differentiation of its product line-up in quality, price, prestige, and the level of service. If the company intends to promote an expensive shampoo, this approach stimulates the formation of a special demand with different levels of elasticity and the ability to raise the price in response of the increased demand by a particular category of consumers. The main cons are insignificant market coverage, empowerment of external mediators with exclusive rights, and the limit of their business activities. Moreover, the limited number of direct distributors confines opportunities to capture extra potential customers more rapidly. The exclusive distribution approach should attract more customers, because target markets are not numerous and diversified. A special form of exclusive distribution is a franchise. The development of this activity is hampered by the lack of legislation in different countries. However, this distribution approach facilitates the management of selling operations (Paley, 2007).
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Laptop Distribution Strategy
The selling of inexpensive laptop computers that are not fancy, but still allow consumers to perform basic functions such as surfing the internet or using basic applications such as Word and Excel is worthwhile to perform through the intensive distribution approach. Old-fashioned products should be promoted and sold quickly and actively. The selection of indirect selling is the most convenient alternative for items of low demand due to fashion and obsolescence of these finished products. Therefore, the strategy should be chosen according to time frameworks and a wide range of distributions places (Paley, 2007).
Inexpensive computers should be sold through the intensive distribution approach to points of purchase. The intensive distribution of computers will increase laptops sales. Thus, the company will provide supplies of its products to the greatest possible number of outlets to make them available to numerous consumers. Thus, it will use the indirect selling approach for the purpose of effective marketing efforts (Richardson & Gosnay, 2010). Intensive distribution should be used for the transmission and distribution of inexpensive computers as consumer goods of fast turnover. This form of distribution allows the company to deal with all possible mediators of sales and target the sale of these goods.
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Intensive distribution has both pros and cons of its application. Pros are that the company provides high product availability and market share. Numerous indirect sellers enable the company to distribute computers among wide markets segments in order to stimulate sales. Cons are an increase in marketing costs and problems with the company’s image. This strategy does not complicate accurate positioning of the brand. Control over pricing and the discount system can be almost lost. The successful implementation of this intensive distribution strategy depends on the number of outlets and the convenience of their locations to consumers. These factors complicate the position of the manufacturer in the market.
Cloth Design Distribution Strategy
Selective distribution involves the use by a limited number of intermediaries who have the exclusive right to sell manufacturer’s products in its territory. In order to implement its services, the company will establish business relationships with selected ateliers and expect effective marketing in the right places and in limited quantity to save the exclusivity of the design (Richardson & Gosnay, 2010). The selective distribution of design studio products allows achieving the desired market coverage under more strict control and at a lower cost than with intensive marketing.
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Selective distribution will imply a selective approach to building supply channels caused by the need to cooperate only with those studios and web designers who have relevant qualifications and expertise in the implementation of such services (“Marketing Channels,” 2014). Selective distribution is acceptable for fashion design and execution of orders that characterize the market of pre-selected and sophisticated technical projects of cloth design that require advisory sales and a high level of pre- and after-sales service. Implementing the selective strategy, the design studio should correctly choose an appropriate distribution approach that will meet expectations of ateliers and other distribution partners.