Press "Enter" to skip to content

Different Distribution Strategies

Product distribution is the process of getting goods into consumers hands and in turn, providing them with a product or service they can use. A distribution company or agent acts as a middleman between the manufacturer and the consumer. They also act as a clearing house for receiving, packing and distributing the goods. This article briefly discusses product distribution strategies.

There are two basic types of product distribution strategies: direct and indirect. Direct distribution involves only a single manufacturer supplying the product directly to the end user. A typical contemporary example is YouTubeStorm. Indirect distribution, on the other hand, involves a number of manufacturers, distributors and brokers that work together to distribute the product. The most common type of indirect distribution strategies includes group distribution and network distribution. Some distribution companies, distributors and brokers offer multiple distribution strategies to their clients.

Direct product distribution strategies involve only one manufacturer distributing the product to the end user. Although this provides maximum cost savings and efficiency, it comes at the expense of market penetration. Direct product distribution strategies tend to be used by large companies that have the resources and marketing power to dominate a market. Smaller companies, which don’t have as much money or market power, can’t afford to have their own distribution company.

Manufacturers tend to concentrate their resources on developing and producing new products rather than expanding their production capabilities to meet growing demand. As a result, they often do not have the financial means to develop and manufacture goods to meet changing consumer demands. A number of distribution companies provide these goods to companies under contract. These distributors make money by taking a fee from the manufacturer. By focusing on developing new products and increasing market share, these companies help ensure overall profit margins.

On the flip side, many manufacturers are reluctant to expend the resources necessary to hire third-party distribution companies for the purposes of selling their products. They view distributors as competitors, potentially undermining their competitive edge. Often, manufacturers invest more in research and development than in marketing, both of which can be costly. Moreover, distributing the manufacturer’s products requires an understanding of the target market. It may not be profitable for manufacturers to distribute goods to consumers in regions where there is a high rate of unemployment.

Product distribution involves two primary activities locating the product to sell, and marketing the product to consumers. Location is a very important factor. If the manufacturer does not know where the consumer will purchase its goods, then location is not a major factor. Distribution involves locating the product to be sold, and persuading consumers to buy it. Some distribution methods include retail sales, bulk purchases, trade shows, and direct mail campaigns.

Marketing involves getting the most possible sales for the manufacturer. Distribution channels have different techniques for getting the most out of distribution costs. One way is to have lower minimum order requirements; another is to charge higher prices for products that are more popular with consumers. The strategies involved in marketing differ between retailers and manufacturers.

Product distribution involves a number of channels. Some of these include widespread distribution channels such as retail stores, wholesalers, and import/export channels, and intensive distribution channels such as sole sales, joint venture, government and subsidized sales, and sole distribution. Although some of these channels generate more sales than others, they each have their own pros and cons and all require careful management.

Many retailers prefer to develop extensive distribution networks because it is less costly than developing new products in a limited fashion. This strategy allows retailers to reach markets at little or no risk, while at the same time maintaining a strong brand image. It is possible to start up new distribution channels without taking on significant financial risks. Some new products can be launched without any investment by the retailer, but there is still a need for funding for development and expansion. Many retailers choose to develop extensive distribution channels for existing products, because it allows them to capture markets that would be difficult to penetrate with a new product.

For small businesses, a distribution strategy is usually developed by the owner or a small business manager who has experience in marketing. A distribution strategy can involve many small business processes such as purchasing, storing, and distributing goods. A distribution strategy can also involve complex operations such as packing, labeling, and shipping. The size of a distribution network can vary significantly, depending on the product mix, market penetration, and preferred channel size.

Some of the most common distribution strategies include exclusive distribution, selective distribution, central distribution, network distribution, and point-of-sale distribution. Exclusivity describes a limited number of products available to the retailer. Products that are exclusive to a retailer are usually sold to customers who purchase their particular product from the retailer. Most distributors offering exclusive distribution give customers a choice of buying other types of goods from other companies. Selective distribution allows retailers to sell a limited amount of a product to consumers in a specific location. Point-of-sale distribution involves delivering goods directly to customers.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *