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Essay On Distribution Channels

Distribution Strategy Essay

Introduction

The core of this presentation is to discuss the theory of distribution strategy with the underlying real life examples of McDonald's fast-food restaurants in Australia. In other words, the aim is to discuss McDonald's distribution channel, the way this fast-food restaurant gets its products to the market. Nonetheless, this presentation will demonstrate that McDonald's distribution strategy is effective in many cultures. In the theory of marketing mix, place (distribution) determines where the product will be sold and how it will get there. In fact, McDonald's is the leading global foodservice retailer, with more than 30,000 local restaurants serving nearly 46 million people each day in 121 different countries. Approximately 80 percent of all McDonald's restaurants worldwide are owned and operated by independent franchisors. Furthermore, at the essence of place decisions, Kotler (et al., 2001, p. 513) claims that, "retailers, particularly image fast foods chains often state their seven P's of marketing to be, that is location, location, location, location, location, location and location." Hence, a retailer's location is the key to attracting customers. The costs of the building or leasing facilities is a major factor on the retailer's profits. Thus, site location decisions are among the most important the retailer make (Kotler, et al., 2001, p. 513).

Intensive Distribution

On the other hand, McDonald's opened its first restaurant in Australia in December 1971. Today there are more than 690 restaurants throughout Australia and serving in excess of one million customers per day and employing over 55,000 staff. Therefore, you can find them everywhere in Australia, where some of the McDonald's are open 24 hours per day which satisfy people's needs and wants, especially for exists their hunger. This kind of distribution strategy is called "intensive distribution", means marking the product available for sale through all possible channels of distribution. As defined by Kotler (et al., 2001, p. 487), "intensive distribution is stocking the product in as many outlets as possible." In addition, this strategy must be designed to reach the consumer wants at anytime and anywhere.

Vertical marketing network (VMN)

Furthermore, to quote Kotler (et al., 2001, p. 482), a franchise organization is "a contractual vertical marketing network in which a channel member called a franchisor links several stages in production-distribution process". McDonald's has adopted the service-firm-sponsored retailer franchise network, in which a service firm licenses a network of retailers to bring its service to consumers (Kotler, et al., 2001, p. 482). Nevertheless, McDonald's caters to a large consumer market with varying tastes and thus cannot afford to...

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Marketing Channels Essay examples

1066 Words5 Pages

Marketing Channels

The marketing channel(s) that will be used to distribute that product and the reason why these channels were selected
Our marketing channels which will be used to distribute the household cleaning products are direct and indirect to consumers and direct and indirect to businesses.
Direct selling is a dynamic, vibrant, rapidly expanding channel of distribution for the marketing of cleaning products. Direct marketing presents the product and service directly to consumers in a face to face manner, generally in their homes or homes of others, at their workplace and other places away from permanent retail location. Direct sales typically occur through explanation or person demonstration by an independent direct…show more content…

Plans for managing and motivating the channel members
Managing: Not only must we sell through these intermediaries, but to them and with them as well. These relationships are considered as first-time partners and customers. Direct marketing will give us the opportunity to introduce our product to potential buyers. By attaining a functional list (from a communication service) of buyers who use similar products, we can initiate a promotion in the form of coupons and discounts. We could use product advertisement, and send free samples and trials to the customers. We could provide a toll free phone number with a live person to assist with questions or problems. We shall practice a strong partner relationship management (PRM) to forge long-term partnerships with all of our channel members. This will create a marketing system that will meet the needs of us and our partners.

Motivating: We must be able to convince our distributors that they can succeed better by working together as part of a “cohesive value delivery system.” We will plan merchandising goals and strategies, inventory levels, and advertising and promotion plans jointly to keep all intermediaries up to date on each situation at hand. Nowadays, many companies are installing integrated high tech partner relationship management (PRM) systems to coordinate their channel marketing as a whole. We can now use this software to help recruit, train, organize, manage, motivate, and

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