Channel Concepts: Distributing the Product
Read this chapter. Push and pull strategies are based on how the customer perceives a product. For example, if the company wants to sell a product, it may aggressively push it through the distribution channel and into stores with pricing incentives. This is often seen with products the customer does not have a perceived need or desire for. A pull strategy is based on satisfying a customer's wants or needs. It is almost as if the customer is pulling the product through the distribution channel. Channel membership is a distribution strategy based on the type of product in question. If quality and reliability are important, marketers will use exclusive distributions or "authorized resellers". Intensive distribution is the opposite; a marketer will allow just about anyone to carry a product. Convenience foods are a good example. Just about every check-out line in a store now has snacks and sodas.
Review
- The complex mechanism of connecting the producer with the consumer is referred to as the channel of distribution.
- Five "flows" are suggested reflect the ties of channel members with other agencies in the distribution of goods and services.
- A channel performs three important functions: (a) transactional functions, (b) logistical functions, and (c) facilitating functions.
- Channel strategies are evident for service products as well as for physical products.
- Options available for organizing the channel structure include: (a) conventional channels, (b) vertical marketing systems, (c) horizontal channel systems, and (d) multiple channel networks.
- Designing the optimal distribution channel depends on the objectives of the firm and the characteristics of available channel options.