The importance of good distribution decisions in designing your marketing plan
Effective channels of distribution make the right quantities of the right product(s) available in the right place(s) at the right time(s) to satisfy target customers, while reducing the costs of marketing and acquiring the product(s).
So how can you successfully design and manage your distribution channels?
Design marketing channels that enhance product(s) availability, satisfy customer service requirements, ensure promotional effort, secure timely and detailed market information, increase cost-effectiveness, and maintain flexibility. Assess the performance of each channel by measuring the achievement of each of these objectives.
Decide upon the suitable types and numbers of middlemen to include in your distribution channel(s): merchant wholesalers, agent middlemen, retailers, and facilitating agencies.
Manage integrated distribution systems through: a corporate VMS (which includes a vertically integrated system), a contractual VMS (which formulates agreements indicating system members’ rights and obligations), an administered VMS (in which a business uses its economic position or expertise to provide inducements for cooperation from other members), or relational VMS (where cooperation between two or more channel partners is based on norms of mutual trust).
Recognize and resolve potential channel conflicts early on by: involving channel members in policy decisions, enhancing interaction among personnel at all levels, focusing on joint goals, and utilizing mediation and arbitration.
Remember that customers will not buy your good or service unless it is readily available when and where they want to buy it!