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You are a marketing manager of a medium size manufacturing company. The President has just made the following statement…”The distribution strategy activities are not a concern of the marketing department, the function of the marketing department is to sell the product, so let the rest of the company handled production and distribution…”. How would you respond to the statement? Discuss whether you agree or disagree with the statement and justify your answers

Answer
Subject:   Marketing Management
Question:   You are a marketing manager of a medium size manufacturing company. The President has just made the following statement…”The distribution strategy activities are not a concern of the marketing department, the function of the marketing department is to sell the product, so let the rest of the company handled production and distribution…”. How would you respond to the statement? Discuss whether you agree or disagree with the statement and justify your answers
Options:





I, TOTALLY, DISAGREE  WITH  THE STATEMENT.

DISTRIBUTION  IS  A  KEY ELEMENT  OF  MARKETING.

AS  AN EXAMPLE  OF  FMCG   PRODUCT.

Importance of distribution channels in marketing of  sunfeast biscuits



THE  CHANNELS  OF  DISTRIBUTION   ARE CHOSEN  FOR
THE  COMBINED  EFFORTS    OF
-effectiveness
-efficiency
-improves  customer  satisfaction.
-productivity
-profitability.

There are fundamental economical reasons why an  organization  might prefer to exercise working  closely  with  channel resellers.
-Purchase experiences vary among different channels
- customers have different preferences with respect to purchase experiences.
-Price and non-price factors such as location, product assortment, and customer service also influence customers' channel choices.
- Multi-channel distribution enables the firm to access different customer segments, creating a potential for larger demand and market share.
-more extensive market presence increases the customers' awareness, creating higher brand loyalty for existing as well as future products.

EXAMPLE  OF  CHANNELS

-WHOLESALER
-RETAILERS
-DISTRIBUTORS
-FRANCHISEES
-ONLINE   SELLING
-DOOR  TO  DOOR  SELLING
-DIRECT  MARKETING
-ROUTE  TRADE
-VENDING  MACHINE
ETC ETC
 Wholesalers- buy product from the
manufacturer and then resell it to retailers.
 E-tailers- buy product from the wholesaler and
then sell it directly to consumer.
 Brokers- facilitate transactions between buyers
and sellers, called market makers.
 Agents- Manufacturing or Purchasing agents
depending on who they are working for.

WHAT  TRANSACTIONAL   SUPPORT  DO  THE  MARKETING  CHANNEL  OFFER

– Making contact with buyers
– Using communication strategies to make them aware of products.
– Matching products to buyers’ needs:
• Shopping agents
• Collaborative filtering agents
– Negotiating prices
– Processing transactions

WHAT  LOGISTICAL  SUPPORT

– The physical distribution such as transportation and storing inventory,
often outsourced to third party logistics providers.
-order processing,
-ensuring  timely delivery of stock.
– Physical distribution
– Aggregating products (category killers)
– Third-Party logistics (outsourced logistics)


WHAT  FACILITATING  FUNCTIONAL  SUPPORT
DO  THEY  OFFER

– Include marketing research about buyers
-Accurate assessment of the size and characteristics of the target
audience helps manufacturers with product development and
marketing communications.

offer site interaction report that
details to what extent a site shares audience with another site,
showing exclusive and duplicated audience.

– Financing of purchases.
-Financing purchases is an important function, intermediaries try
to do everything possible to make it easy for customers to pay in
order to close the sale.
-Secure Electronic Transactions

HELPS  THE  ORGANIZATION  TO FOCUS
-Intermediaries allow corporation to maintain
focus on their core business.

WHAT IS THE NEW SUPPORT--
internet equivalent

• Online intermediaries are more efficient than their
brick+mortar counterpart. (Cost savings).
• Creation of new intermediary (e.g. yahoo broadcast):
• Shopping agents
• Buyer cooperatives
• Metamediaries

@@@@@@@@@@@@@@@@@@@@@@

SUNFEAST
The following describes the factors that influence the choice of distribution channel by a business:
1.COMPANY  VISION
2.COMPANY  MISSION
3.COMPANY   OBJECTIVE
4.COMPANY  STRATEGY
5.MARKETING  OBJECTIVE
6.MARKETING  STRATEGY.
 
7.MARKET  FACTOR  INFLUENCE
An important market factor is "buyer behaviour"; how do buyer's want to purchase the product? Do they prefer to buy from retailers, locally, via mail order or perhaps over the Internet? Another important factor is buyer needs for product information, installation and servicing. Which channels are best served to provide the customer with the information they need before buying? Does the product need specific technical assistance either to install or service a product? Intermediaries are often best placed to provide servicing rather than the original producer - for example in the case of motor cars.
The willingness of channel intermediaries to market product is also a factor. Retailers in particular invest heavily in properties, shop fitting etc. They may decide not to support a particular product if it requires too much investment (e.g. training, display equipment, warehousing).
Another important factor is intermediary cost. Intermediaries typically charge a "mark-up" or "commission" for participating in the channel. This might be deemed unacceptably high for the ultimate producer business

PRODUCER  FACTOR
A key question is whether the producer have the resources to perform the functions of the channel? For example a producer may not have the resources to recruit, train and equip a sales team. If so, the only option may be to use agents and/or other distributors.
Producers may also feel that they do not possess the customer-based skills to distribute their products. Many channel intermediaries focus heavily on the customer interface as a way of creating competitive advantage and cementing the relationship with their supplying producers.
Another factor is the extent to which producers want to maintain control over how, to whom and at what price a product is sold. If a manufacturer sells via a retailer, they effective lose control over the final consumer price, since the retailer sets the price and any relevant discounts or promotional offers. Similarly, there is no guarantee for a producer that their product/(s) are actually been stocked by the retailer. Direct distribution gives a producer much more control over these issues

Large complex products are often supplied direct to customers (e.g. complex medical equipment sold to hospitals). By contrast perishable products (such as frozen food, meat, bread) require relatively short distribution channels - ideally suited to using intermediaries such as retailers

Distribution Intensity
There are three broad options - intensive, selective and exclusive distribution:
Intensive distribution aims to provide saturation coverage of the market by using all available outlets. For many products, total sales are directly linked to the number of outlets used (e.g. cigarettes, beer). Intensive distribution is usually required where customers have a range of acceptable brands to chose from. In other words, if one brand is not available, a customer will simply choose another.
Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g. training) on them. Selective distribution works best when consumers are prepared to "shop around" - in other words - they have a preference for a particular brand or price and will search out the outlets that supply.
Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area.

Once you have selected and developed a unique product or business idea, correctly positioned and targeted it to buyers, and developed your packaging and pricing, the selection of distribution channels and sales representation is key to successful marketing.
It's fairly easy to change many of your marketing tactics and strategies on a periodic basis; pricing, packaging, and product mix are among these flexible choices. However, distribution and sales decisions, once made, are much more difficult to change. And distribution affects the selection and utilization of all other marketing tools.
There is a wide variety of possible distribution channels, including:
1   retail outlets owned by your company or by an independent merchant or chain
2   wholesale outlets of your own or those of independent distributors or brokers
3   sales force compensated by salary, commission, or both
4   direct mail via your own catalog or flyers
5   telemarketing on your own or through a contract firm
6   cybermarketing, surfing the newest frontier
7   TV and cable direct marketing and home shopping channels
Distribution choices for a service business follow the same lines as those for a physical product. For example, financial planning services may be offered from printed material, sold at retail by consultants, delivered electronically by computer, or relayed by phone, fax or mail.
Steps for selecting distribution and sales force representation include:
Identify how competitors' products are sold.
Analyze strengths, weaknesses, opportunities, and threats for your business.
Examine costs of channels and sales force options.
Determine which distribution options match your overall marketing strategy.
Prioritize your distribution choices.
=========================================

SUNFEAST
THE  MARKETERS   TRY  TO  PUT  THE  BRANDED  PRODUCT
IN  FRONT   OF   THE   CUSTOMER  IN  EXACTLY  THE   SAME  MANNER.

FOR   WHICH   THEY   USE   A   CHANNEL  FOR  DISTRIBUTION.

SO   THE   CHANNEL   IS   ''  THE   ARM  OF   THE  MARKETING''
OF   THE  BRANDED  PRODUCT.

Marketing Channels is  the path or route taken by goods and services as they move from producer to final consumer; in addition to the goods and services themselves, title, information, promotion and payment also move along the marketing channels carry.
HENCE   THE  CHANNEL  MUST  RELECT  THE  IMAGE   OF
THE  BRAND.

When an organisation is embarking on a channel marketing strategy, it needs to consider all the parameters  that  will encompass  customer communications,  customer value modelling, partnership marketing,  customer service operations, marketing technologies,   and   distribution.    
CHANNEL  Partners must have the right positioning and market exposure in order to drive up sales in a real and meaningful way and thereby to increase profits.
======================================================
SUNFEAST
FIRST,  THROUGH  WHOLESALERS
AND  WHO  IN  TURN  CHANNEL  IT  THROUGH  RETAILERS.
-intensive / extensive  distribution.
-financing  of  purchases
-efficiency
-improved  customer  service
-productive
-profitable
-manage  product  assortment
-multichannel
-aggregate  process
-third  party  logistics
-timely  delivery
SUNFEAST  DISTRIBUTION  IS  SUPPORTED  BY
INTEGRATED  MARKETING  COMMUNICATION.

INTEGRATED  Marketing communications has a mix. Elements of the mix are blended in different quantities in a campaign. The marketing communications mix includes many different elements, and the following list is by no means conclusive. It is recognised that there is some cross over between individual elements (e.g. Is donating computers to schools, by asking shoppers to collect vouchers, public relations or sales promotion?) Here are the key of the marketing communications mix.
FROM   THE  MIX  BELOW,  YOU   WILL SEE  THAT
THE   ADVERTISING  IS  A  MAJOR / INTEGRAL  PART
OF  INTEGRATED  MARKETING COMMUNICATION.


The Marketing Communications Mix.

Personal Selling ,
-here the marketing communication is used
*to  inform the customers/ prospects
*to  create awareness
*to  present  the product
*to  influence the  customer
*to  sell  benefits
*to help  the  customer to  make the  buying  decision
*to  seek  commitment
*to  help  to  close the  sale.
---------------------------------------------------------------------------------
Sales Promotion
-here the  marketing  communication is  used
*to inform  the  customers
*to  physically present
*to influence  the  customers
*to help  the  customers  to feel the  product
*to help  the  customer to  make the  buying  decision
*to offer  consumer incentives
*to  help  the  final  transactions
------------------------------------------------------------------------------
Public Relations (and publicity)
-here the  marketing  communication is  used
*to  publicise  the company
*to  publicise  the  product
*to publicise  the  company's  research/ development
*to  publicise the  company  image
*to  create  the  company  brand
*to  inform  public
*to  communicate  with the community.
*to  establish  relations  with government  
*to  establish   community  relations
----------------------------------------------------------------------
Direct Mail
-here the  marketing  communication is  used
*to  inform
*to  talk  to  individuals
*to  focus  on  niche  market
*to inform the  decision  makers  directly
*to   advertise cost efficiently
*to promote selected  market  segments
*to contact individuals  for  one-to-one  marketing
----------------------------------------------------------------------
Trade Fairs and Exhibitions
-here the  marketing  communication is  used
*to  inform  individuals
*to  provide  visibility
*to  talk  to  individuals
*to inform the  decision  makers  directly
*to   advertise cost efficiently
*to promote person to  person
*to contact individuals  for  one-to-one  marketing
--------------------------------------------------------------------
Advertising (above and below the line)
-here the  marketing  communication is  used
ABOVE  THE  LINE
*to  MASS  inform the customers/ prospects
*to  create MASS awareness
*to  present  the product
*to  influence the  customer
*to  sell  benefits
*to help  the  customer to  make the  buying  decision
HERE  IS  PR  IS  INCLUDED   AS  A  MASS  COMMICATION
TOOL .
------------------------
BELOW  THE  LINE
*to  physically present
*to make it  visible at  the  point  of sale.
*to influence  the  customers
*to help  the  customers  to feel the  product
*to help  the  customer to  make the  buying  decision
*to offer  consumer incentives
*to  help  the  final  transactions
*to  display  and promote
*to  merchandise the product
------------------------------------------------------------------------------
Sponsorship
-here the  marketing  communication is  used
*to  MASS  inform the customers/ prospects
*to  create MASS awareness
*to  present  the product
*to  influence the  customer
*to  sell  benefits
---------------------------------------------------------
Packaging -here the  marketing  communication is  used
-here the  marketing  communication is  used
*to  MASS  inform the customers/ prospects
*to  create MASS awareness
*to  present  the product
*to  influence the  customer
*to  make  it  visible  at  the  point  of  sale
--------------------------------------------------------------
Merchandising (and point-of-sale)  
-here the  marketing  communication is  used
*to create visiblity  at the point of  sale.
*to influence  the  customers
*to help  the  customers  to feel the  product
*to help  the  customer to  make the  buying  decision
*to offer  consumer incentives
*to  help  the  final  transactions
*to  display  and promote
*to  merchandise the product
--------------------------------------------------------------------
EMarketing (and Internet promotions)
-here the  marketing  communication is  used
*to  inform
*to  talk  to  individuals
*to  focus  on  niche  market
*to inform the  decision  makers  directly
*to   advertise cost efficiently
----------------------------------------------------------------
Branding (and corporate identity)
-here the  marketing  communication is  used
*to  create an  unique position  for the company
*to create  an  unique  position  for the product
*to create unique visibility
*to make it  easy to  identify
*to  make it easy to  buy
*to make it  easy  to  sell
-----------------------------------------------------------
ALL  THE  INTEGRATED MARKETING  COMMUNICATION EFFORTS  ARE  DIRECTED
-TO  MAKE  IT EASY  FOR  THE  CUSTOMERS  TO  MAKE  THE BUYING  DECISION.
-HENCE  MORE  SALES.

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Leo Lingham

Expertise

human resource management, human resource planning, strategic planning in resource, management development, training, business coaching, management training, coaching, counseling, recruitment, selection, performance management.

Experience

18 years of managerial working exercise which covers business planning , strategic planning, marketing, sales management,
management service, organization development

PLUS

24 years of management consulting which includes business planning, corporate planning, strategic planning, business development, product management, human resource management/ development,training,
business coaching, etc

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Principal---BESTBUSICON Pty Ltd

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MASTERS IN SCIENCE

MASTERS IN BUSINESS ADMINSTRATION

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