Introduction
Distribution strategies are linked with the availability challenge the company faces to make available the products in the market. Availability challenges always paste with the effective distribution strategy. Effective distribution strategies are made by studying the past record of sales or demand and predicting future sales. The sales forecasting and demand forecasting are done using the statistical techniques and analysis.
Simply, distribution strategies are concerned with the plans made considering the availability of the products in the market in the required quantity and required quality. It plays a very vital role in meeting the customer’s requirements. If the product is not available in the market in the required quantity or quality the customers go for other Alternative products in the market to stop. It leads to pull down the sales and demand of the particular product.
In order to avoid switching the customer’s preferences from our products to other alternative products in the market,, distribution strategies were implemented successfully and effectively. The decision taken in advance regarding the product distributed to the various markets influences
Direct distribution
Direct distribution involves distributing the products through the company outlets or online stores and it can be sold through the sales representative of the company. Companies can benefit from better customer experiences and collect actual data regarding customer satisfaction level, and consumer behavior. Direct distribution channels have some limitations or restrictions to their limited reach. Direct distribution cannot allow the business organization to reach the largest customers or market.
Advantages of direct distribution
Customers’ perceptions, expectations, complaints, and consumers buying beaver can be accurately studied by the company through the direct distribution channel.
Segmentation, targeting, and positioning of the products can be easily and effectively implemented by the company through the direct distribution channel.
Indirect distribution
Indirect distribution the name itself explained what it means. Get involved in distributing the goods through various intermediaries such as wholesalers, distributors, retailers, and then to the end consumers or customers. This channel enables the business organization to spread its products across the largest size of the market more quickly.
Advantages
Helps to spread the market
Help to create more revenue by selling the products to all the customers
Disadvantages
Limited control over the customer’s experience as the products are sold by various internally
Very difficult to conduct market research as the accuracy of the data is less than other distribution methods
Selective distribution
This distribution strategy deals with distributing the goods through limited channels of distribution and the distribution allotted based on some criteria. Few of the distributors are permitted to sell or distribute the goods or products in the market.
Advantages
Selective distribution enables organizations to have more control on customers’ experience to be better.
Selected distributors allows an organization to have more control on the distribution
Is it to ensure excellence in the distribution supply chain management
Disadvantages
Limited distribution of the product restricts the increase in sales across the whole market
Limited access to the customers as the availability of products can be reduced to all places
Franchising
Franchise distribution strategy permits independent businessmen or entrepreneurs to sell the product with branding and promotion according to the company’s criteria. Business organizations help such independent entrepreneurs to promote the brand,, support technically non technically and set the standard for running the business activities. This distribution strategy shares the risks and responsibilities of independent entrepreneurs.
It helps any business organization to grow their business in all the markets irrespective of all the risks. Instead of permitting distribution to all businessmen companies can restrict independent entrepreneurs to sell their groups according to their criteria or standards.
Example
McDonald’s provided franchising across the globe effectively and efficiently. Whole World accepts the quality products and services offered by this franchise.
Many movie theaters across the globe running entertainment businesses successfully through the franchisee distribution strategy.
KFC is one of the leading organizations that has been running a number of franchisees across the globe.
Advantages
A franchise distribution strategy enables the organization to implement standardized distribution methods
It gives more control over the distribution and hence the quality can easily be maintained
Disadvantages
All markets cannot be captured by means of this strategy
Independent entrepreneurs face challenges in implementing the standard
Exclusive distribution strategy
Exclusive distribution strategy enables business organization more specifically restriction in the distribution channel. It works like a selective distribution strategy with more specific restrictions on the distribution channel. Various luxurious brands permit very few distributors and retailers to sell their products in the market based on their criteria.
Advantages
Easy to implement the segmentation, targeting, and positioning strategies
Helps to conduct market research very conveniently as the limited data and customers explain
Disadvantages
Limited market access
Intensive distribution strategy
This distribution strategy works opposite to the exclusive and selective distribution strategies good stuff. It involves spreading the distribution through as many distributors or as little as possible. All type of FMCG products company adopts an intensive distribution strategy. This strategy enables business organizations to spread their distribution supply chain management practices across the largest size of the market.
Example
Hindustan Unilever products in India such as RIN washing Bar, Wheel Washing powder, Lux, and Dove are examples that are available at all the returns of all the places of the country. These products are available from the villages to the urban market.
Advantages
An intensive distribution strategy helps an organization provide access to each customer.
This strategy helps to generate the highest revenue by selling the products to all the customers
An intensive distribution strategy enables the business organization to increase its profitability
It helps to retain the customers for the longer. By making availability of the products available all the time.
disadvantages
It is very difficult to collect the data of customers by behavior consumption pattern and their expectations.
It is very difficult to implement the segmentation targeting and positioning according to the requirements of the company’s objectives.
Complete cities in the execution of distribution supply chain management
Market size is more so that difficulty is more in maintaining the required stock of manufactured products
Online Distribution Strategy
Online distribution strategies are one of the most popular and effective distribution strategies. The largest auto-produced quantity of the goods or products have been sold through the online distribution channels
Online distribution channels such as Amazon and Flipkart are the two biggest leaders in selling goods online. Millions of products are sold through this channel. This is the easiest and most convenient way of purchasing goods from online platforms to customers.
Advantages of online distribution strategy
Any customer can access this platform to purchase any type of physical goods
Write the product can easily shown through an online platform
Companies can easily advertise and promote their products through this online platform with sales
Data regarding customer buying behavior can easily be collected through an online platform
Disadvantages of online distribution strategy
Delivery service is not available in some of the rural areas
Customers need to wait for two to seven days to get the product