Distribution Intensity Is Commonly Divided Into Three Levels

BUA370 Chapter 17: Retailing and Multichannel Marketing

Multichannel strategySelling in more than one channel (e.g., stores, Internet, catalog).
What are the factors manufacturers should consider when developing strategies for working with retailers?1. Choosing retail partners
2. Identifying types of retailers
3. Developing a retail strategy
4. Managing a multichannel strategy
Considerations associated with choosing retail partners1. Channel structure; the degree to which the channel is vertically integrated.
2. Customer expectations; retailers should know consumer preferences regarding manufacturers. They should also know where their target consumers expect to find their products and those of their competitors.
3. Channel member characteristics; generally larger, sophisticated channel members are less likely to use supply chain intermediaries
Distribution IntensityThe number of channel members to use at each level of the marketing channel. distribution intensity is commonly divided into three levels: intensive, exclusive, and selective
Intensive distributionA level of distribution intensity whereby a firm tries to place its products and services in as many outlets as possible.
Exclusive distributionGranting exclusive geographic territories to one or very few retail customers so no other retailers in the territory can sell a particular brand. This can benefit manufactures by assuring them that the most appropriate retailers represent their products.
Selective distributionThis relies on a few selected retail customers in a territory to sell products. Like exclusive distribution, this helps a seller maintain a particular image and control the flow of merchandise into an area.
Retail strategy using 4 P’sProduct: offering assortments give customers choice.
Price: price helps define the value and the service, sometimes image.
Promotion: this can mean the difference between flat sales and a growing consumer base.
Place: convenience is the key to success; an aspect being location.
What are the benefits of stores for consumers?Browsing, touching and feeling products, personal service, cash & credit payment, entertainment and social experience, immediate gratification, and risk reduction.
What are the benefits of internet and multichannel retailing?Deeper and broader selections, personalization in customer service and offerings, and expanded market presence.
Challenges of mutlichannel retailingAn effective multichannel operation requires an integrated CRM system, a consistent brand image across all channels, consistent pricing in various channels, and a supply chain that efficiently delivers merchandise to multiple channels.