Developing a Distribution Strategy

Marketing consists of the "4Ps:" product, place, promotion and price. Product refers to what is being sold, promotion to how it is touted in the market, and price to the strategy used to generate revenue. Place is the method of distribution that the company selects to move its product to the market. This consideration, distribution, can be critical to a company's success since choosing the wrong distribution system can mean that the company's product is not available to the consumers when they need it. Lost sales result, and companies can suffer serious consequences due to poor distribution. This research considers the overall issue of distribution and factors that companies need to take into account when developing a distribution strategy.

Few manufacturers sell their goods directly to end users; one of the primary exceptions to this is farmers who sell to consumers. However, most manufacturers sell their goods to wholesalers, who sell to distributors, who sell to retail stores, who sell to consumers. Sometimes the distributor is eliminated, or the wholesaler and distributor are the same. In some instances, such as with retailers who are as large as WalMart, the manufacturers do market directly to the retailer.

This system, while it sounds cumbersome when described, can actually prove quite efficient. Manufacturers typically produce large quantities of goods. These are divided into smaller shipments (but still containing large numbers

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here is no excess inventory carrying costs. However, this is not an effective method for retailers because they cannot determine demand with the accuracy of a foreman on a production line. Recommendations Companies who are evaluating their distribution system need to take into account the end user and the best way to reach that user. Industrial users are not reached effectively through retailers, and consumers are not reached through industrial supply houses. Some industries do not lend themselves well to wholesalers and distributors, and manufacturers serving only a local market may be able to more efficiently serve as wholesaler to their clients. Building a close relationship with customers and suppliers is important so that manufacturers and distributors have a clear idea of the factors behind increases (or decreases) in demand. This can help prevent surpluses and shortages and ensure that all of the participants in the distribution channel receive the maximum benefit from the system. These relationships can also provide valuable feedback about product ideas and innovation, and may help the company become more competitive. Introduction The image that is established for a product can be a significant factor to that p

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