Fundamentals of Marketing

Abstract

When the brand is ready and all the strategies of brand management and positioning are done, distribution comes into action. Products are provided in the radius of customers through a formal channel of distribution. There are various intermediaries that shape a proper channel of distribution. The products are delivered to customers through direct or indirect marketing channels. Strategies are developed in a way so that more of the target market can be attained towards the product.

Introduction

Channel of distribution is a significant part of any product or service. Channel of distribution is simply a road that joins brand to customers. That is the reason companies work hard on formal and efficient formation of channels of distribution.

Overview of Distribution Channels

Channel of distribution is a set of co-dependent factors and organizations which involves, collaboratively, in making of a product or a service to the customers. These channel of distribution are also called marketing channels because this is the way through which a product or service travels to its destination. The components of distribution channels are transports, routes, inventory management, related staff, etc. All these components collaborate effectively and make economics of demand and supply (Armstrong; Kotler, 2009).

There are two channels of marketing or distributing a product or brand. One is direct distribution in which there is not a third party between a company and customer. Product is directly delivered to the customer in direct distribution. The other is indirect distribution in which there is at least one other party between a company and the customer. Like a company makes a product and then it is delivered to a wholesaler or retailer, where the customer gets it. For example, the chocolate industry has indirect distribution channels. Companies like Cadbury or Kit Kat produces it and then transfers them to business distributors. The business distributors further transfer products to various wholesalers and retailers.

The chocolate industry has conventional distribution channel. There are various independent producers which send their chocolates to various independent wholesalers and distributors. All of them operate in the market with their own objectives in which particular one is profit maximization. All producers and sellers work in their own business way and strategies and no one controls the other.

Analyze Target Market's Needs in Distribution Channels

The target market of the chocolate industry is the youth. The need of the target market is to have fresh and tasty chocolates available to them conveniently whenever they want. It simply gives an objective to the channel of distribution of the chocolate industry players that it should be efficient and the product should be available to almost all retailers and wholesalers in the different cities.

The current channel of distribution followed by the chocolate industry, particularly Cadbury and Kit Kat, is exceptional. The chocolates are available to customers anytime they want. Almost all the retailers and wholesalers have chocolate brands of these companies present all the time. This exceptional distribution channel is the backbone of the brand's success because the product is presented to target market all the time (Distribution channel structure, 2004).

Determine Channel Members with Explanation

Indirect distribution channel is proposed, and is always best, for the chocolate industry. Consumers usually go for chocolate while they are shopping for something else; this is called impulse buying. For this indirect channel distribution, staff members and related personnel should be competitive and qualified for the job. As the members will meet managers and owners of retailers and wholesalers; they should be good in communication, negotiations and activeness (Armstrong; Kotler, 2009).

Channel members in indirect distribution of chocolates