Casestudy: marketing mix- distribution strategy
Question:select two products from the list of the products categories belowand using the teaching materials and any additional research explainwhat you think wound be an appropriate distribution strategy forthem. In doing so compare and contrast the two distributionstrategies explaining why they would be similar or different.
Marketingmix: distribution strategies
Marketingmix is a mechanism used by companies. It involves tactics or actionthat a company’s marketing manager uses in promoting brand of acertain products. It involves pricing, product, promotion and place(Rogers,2001).We are largely going to deal with promotion part of it. In promotion,distribution of good from manufacturer to the end consumer is themain concern. Distribution strategies basically involves distributionof good from the producer( manufacturer) via certain intermediariesdepending on which line of product is dealt with, until it reachesthe final consumer. In expounding on the theme, I have selectedNissan X-trail brand of automobile and Necklace of the star as thebrand under jewelry.
Inorder for the product brand to reach consumer, it follows that,distribution channels integration must be useful (Hill& Jones, 2009).It explains various ways product brand moves from vendor to theconsumer depending on the size of the firm. There various type ofchannels integration. Vertical integration is one the method used bythe manufacturer to make sure product brand is readily available tothe final user. For it to be effective and implemented, cost factoris crucial. This strategy helps company to gain control over itsdistributers in order to increase firm marketwise, securedistribution channels and reduce cost. These strategies require oneto make a decision whether to be in one industry or in manyindustries (Rogers,2001).For example, Nissan X-Trail is a brand of automobile category, forthe cost effective of the company, they need to be in many industriesas to reduce cost and increase its market share. On the other hand,Necklace of the star does not necessarily require being in manyindustries, since it will be more effective less than one industry.The brand (Nissan X-Trail) of automobile, can endorse other firm’schannels in order to be able to penetrate in the market place easily.
Horizontalintegration is another type of channel integration. It happens that,products are similar or alike when supplied in the market place orcomplementary or competitive. This type of integration helps toreduce competition by merging with the competitor. This helps toincrease profit margin by capturing a larger market share througheconomies of scale (Hill& Jones, 2009).For example, Nissan X-Trail manufacturer can combine with anothercompetitor who manufactures the same brand of automobile and they arein the same stage. In contrary, jewelry brands somehow is muchcomplex to find competitors who produce as same product as the othersince they change branding now and then. Also, it is not costly toproduce jewelry products and therefore, no need to combine withcompetitors (Viardot,2004).
Channelintensity strategy, requires the study and analyzing of the marketstructure for the brand to be distributed successfully and reachesthe intended customer. Competition from other firms may affect thedistribution process of a brand (Rogers,2001).Competitors produce similar products and in addiction reduce cost ofthe product in order to capture a wide share of the market. Thereforeas the distributor, one must consider other firms which are alreadyin the market. Furthermore, consider the quantity and quality of theproduct brands in the market. This will lay foundations, on how manybrand’s product will be produced and of what quality. For example,jewelry category may have many similar brands in the market and theonly way to compete with the competitors is to produce goods of highqualities and improve advertising tactics. Likewise, brand ofautomobile (Nissan x-trail) also require well understanding of themarket so as to compete with effectively. Under intensity, there isdistribution opportunities which concentrate on the gap in themarket. It considers who to buy the product brand and who isproducing.
NissanX-Trail and Necklace of the star brand of automobile and jewelryrespectively, are differently distributed due to availability in themarket. In terms of the amount of quantities in the market and theease to production, it takes diverse approach of distribution. It ishardly difficult for new automobile to come in the market but is verypossible for jewelry. Therefore, they have to produce unique brandeach and every time or branding their product occasionally. Also, interms of numbers, they are all over the market but automobile arelimited. Hence, automobile brand may capture the market under oneline of the industry but for jewelry it requires to operate undermany industries.
Basically,as noted by Viardot(2004) it ismuch pertinent for the managers to consider the market. Market givesthe direction of the production in terms of the number of the goodsto be produced and quality needed by the consumer. Having this inmind, they will be able to brand their product in the likeness oftheir consumer hence marketability of the products. Another aspect toconsider, how are the products going reach potential customers? Thiswill be in terms of the cost and reliability. If some of customersare abroad, manufacturer has to seek means of how to export theproduct up to his/her destination. This is much applicable to theautomobile (Nissan x-trail) which mostly are ordered from abroad andhence intermediaries are required for the transaction to be complete.
Managersare required to consider various producer, product andcompetitiveness in the market. This calls for strategies such as,merging with producer, improve product branding and observe andanalyze your competitors in terms of product offering, mode ofchannel of distribution and the pricing mechanism. Also, customermay have a negative impact on certain product’s brand due to itsoriginality. For example, if we compare the automobiles fromdifferent countries it may change or somehow affect the customerpreferences. Automobiles from China and India may differ when weconsider the preferences of consumer. Therefore, manager should aimat globalizing their companies by opening up subsidiaries in as manycountries as possible. Tentatively, this will help reduce cost ofdistributing their products as they will be close to their customerand furthermore, captures a wide market share.
Thetwo brands (Nissan X-Trail and Necklace of the star) have similardistribution strategies as both require capturing a wide market shareas well as retaining their customers. In contrary, they are differentin terms of cost of production and bulkiness. Automobiles are costlyto produce and distribute to the customers whereas Necklace arecheaper and easier to distribute.
Lastly,in this analysis of marketing mix: distribution strategies, managershould be able to analyze market, producer, product and competitorsin order to determine which strategy to follow. Also, he/she mustconcentrate on the cost of distribution and the quantities of theproducts in the market. This will help come up with a concretedecision on which strategy to follow and which minimizes cost andtargets the intended customers.
Hill,C. W. L., & Jones, G. R. (2009). Essentialsof strategic management.Mason, OH: South-Western/Cengage Learning.
Rogers,S. C. (2001). Marketingstrategies, tactics, and techniques: A handbook for practitioners.Westport, Conn: Quorum Books.
Viardot,E. (2004). SuccessfulMarketing Strategies for High-Tech Firms.Norwood: Artech House.