Why is distribution important in marketing
When you think about the distribution methods used by different businesses today, you might come across direct distribution. There are lots of different distribution methods which have their own advantages and disadvantages. In fact, direct distribution is one of the most effective ways for any kind of business to reach out to the market. It enables the company to save on a lot of money and time. If a business wants to increase its sales and reduce its operational costs, then it must opt for direct distribution.
The advantages of using a direct distribution channel
Firstly, it increases the sales of the product. This is because the manufacturer sells directly to the customer and the retailer or distributor does not have to invest in indirect channels. In fact, indirect channels can sometimes cost more than selling directly to the consumers. Furthermore, a direct distribution channel also allows the consumer to purchase products directly from the manufacturer. While an indirect channel takes the product through various other distribution networks to reach the consumer, direct channels enable the consumer to purchase the same product directly from the manufacturer.
The disadvantages of using direct distribution channel
The consumers usually have to travel a great distance to get hold of the manufacturer’s product. The average distance can be between two to four miles between the factory and the consumer’s residence. Also, in most cases, the products do not reach the consumer’s house on a regular basis. They are distributed only when the manufacturer’s special offers are being advertised or when new products are released.
Another major disadvantage of using direct distribution channels is that it causes loss of revenue to the manufacturer. It means that the manufacturer will have to pay a lot of money for advertisements and for other promotional activities carried out by the channel. This money will have to be spent again if the consumer decides to purchase a similar product from any other vendor. On top of this, the price difference can be quite high as well.
The role of a marketing channel in distribution
Marketing channel is often considered to be the more preferred choice for distributing perishable goods as it enables the consumers to buy the same product when it is available. As long as the consumer wants to purchase a particular product, they should be able to do so.
Marketing distribution channels are generally responsible for carrying out the distribution of perishable goods such as food and beverages. These include groceries and other supermarkets, fast food outlets, snack bars and fruit stands, liquor stores, pharmacies and drugstores. In addition, there are also some supermarkets that allow customers to buy frozen food items at a higher price.
Direct marketing channel and its benefits
Direct marketing channel is beneficial to all the stakeholders such as the manufacturer who has to bear the cost of advertising, the retailer who has to bear the cost of production, the wholesaler who has to bear the cost of distributing the perishable goods, the retailers and the consumers. All these stakeholders are benefited by a direct channel of distribution as they are able to get the fresh goods at a cheaper rate and the manufacturers are able to sell their products in larger quantities.
On the flip side, if the goods are not purchased directly by the consumers, then the retailers face a loss as they have no way of selling them at higher prices. The distribution channel also helps the manufacturer to sell their perishable goods faster thereby gaining an advantage over their competitors.
There are two types of distribution channels: direct and indirect.
In the direct method, the manufacturer ensures that the goods reach the final consumer and in the indirect method; the distribution channels make efforts to ensure that the goods reach the final consumers. Direct distribution channels ensure direct contact with the final consumers, whereas in the indirect method, distribution channels make efforts to ensure that the goods reach the final consumers only after they have been purchased from other retailers or suppliers.
This makes direct distribution channels quite popular among the customers as they get the benefit of buying directly from the manufacturers or suppliers. It is also beneficial for the retailers as they gain an opportunity to display their products to the target audience and can reach out to a larger consumer base as compared to using the indirect methods.
Can one level stores be considered in this regard?
One-level stores can be categorized as one of the simplest ways to promote a product or service. In this channel, the retailer does not need to do much to place the order for the goods to be sold. Once the order has been placed, the retailer takes up the task of coordinating the delivery of the same directly to the purchaser. This eliminates the need of stocking the goods in one-level shops and allows the retailer to concentrate on expanding his business, which will ultimately help him earn better profit margins.