The purpose of this research is to examine an account of channels of distribution for the products of Scottish & Newcastle, an Edinburgh, Scotland-based brewer that has international scope. The company, which is traded publicly and is listed on the London Stock Exchange, reportedly is "in the top 10 by sales volume in the world" (Scottish & Newcastle, 2004). That information is in the background of a trade-publication article describing S&N's deliberate expansion of marketing efforts to widen its channels of distribution in major travel venues--in particular with travel retailers--located around the world (Bates, 2004).
Bates sees S&N's expansion effort as an exercise in educating smaller retailers to the benefits of accepting the logistical challenges associated with over-the-counter beer sales. The challenges include the bulk of the product and apparatus required to dispense it (hence retail square footage to accommodate them), as well as the traditional image of beer as something of an add-on to sales of liquors with a more upscale image. S&N's objective, as explained by Bates in citing the company's "newly created travel-retail division," is to counter historical image with practical benefits of traveler preference and (though Bates does not directly make that point) improved retail margins. The company acknowledges that "dispelling the widely held view that selling beer at many travel locations is the retail equivalent of mixing oil and water isn't going to be easy" (Bates, 2004, p. 25). Even so, it claims that its research shows that "beer is often overlooked by operators, despite providing a higher percentage of profit than expected" (p. 25); in other words, the margins are a benefit. A spokesperson for S&N states that the company wants retailers to "start thinking of beer as a category in its own right rather than as an add-on to their liquor and wines business" (Bates, 2004, p. 25).
S&N's channels of distribution have su...