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RESPOND TO DISCUSSION
Probably no area of marketing is growing as fast as distribution (Place) today. Why would you think that is so? What is so important about distribution anyway? How does it affect the marketing mix? Especially, how does distribution affect the product itself? The book says it may act as a determinant of price. How does that work?
RESPOND TO LYNN (PLEASE INCLUDE DETAILS)Lynn Zinderman – Week 6
The distribution channel is the chain of businesses through which a good or service passes until it reaches the end consumer. It has also become one of the fastest-growing areas of marketing. I believe one of the main reasons for this growth is the rising popularity of digital distribution which includes any product or service that can be distributed electronically, such as E*Trade or Itunes. The increasing digitalization is changing how we do business and provides new revenue opportunities. Advanced logistical technologies enabled by big data and analytics also improve supply chain operations at the tactical level. Increasingly, modern companies are automating many of their supply chain processes, substituting mechanized labor for human labor. These technologies improve the speed and accuracy of supply chains to serve end-users.
Distribution is essential because, as consumers, we rely on the link to fulfill most of our wants and needs, such as food, clothes, and entertainment. In addition, businesses’ profit margins depend on how quickly they can turn over their goods.
There are four marketing channels for consumer products: direct, retailer, wholesaler, and agent/broker channels. Marketers and consumers search for the most efficient channel among many available alternatives. Constructing channels for a consumer convenience good such as candy differs from doing so for a specialty good like a Prada handbag. Ideally, channels should limit the number of stops before reaching the end consumer. Making distribution channels as efficient and effective as possible helps keep the purchase prices low.
Regardless of the number of channels used, managers must decide whether it is better to organize channels around customers or tasks. Suppose a manager decides to organize the channels around customers by creating a special distribution system. In that case, they may increase customer satisfaction, but at the expense of the operating cost for the seller. Alternatively, they may choose to organize channels around tasks by using its website to generate leads; this enables the company to perform tasks more efficiently and cut costs. However, The customer’s perception of service quality may also go down as a result.
RESPOND TO JOHN (PLEASE INCLUDE DETAILS)John Weafer – Week 6
Post pandemic consumers are changing the way business is done. Online shopping has increased. People that were trapped at home during the pandemic are ready to spend money. Distribution marketing is growing to meet the customers’ needs by making products and services available to the consumers quickly. Companies are striving to effectively balance supply and demand efficiently. This involves the perfectly timed flow of products, services, materials, financing, and information from businesses to suppliers and ultimately to the customer.
This is important because the distribution of products and services affects profits for the company and affects the value of a product to the customer. A customer that is inconvenienced by the availability of a product will quickly lose value in that product. Missed sales due to products not being available affect profits. Overloaded or empty warehouses due to supply chain problems affect profits.
This affects the marketing mix because the supply of a product needs to meet its demand of it. The challenge is to have the exact amount of the product available to the customer when and where it is desired. Too much or too little supply of the product produces extra costs and missed opportunities.
Distribution marketing also refers to the flow of information. The company’s ability to react quickly to customer issues is important. Making changes to the product or resolving issues with the product efficiently. How the company communicates, collects, and interprets data to make product decisions. How well they communicate with suppliers and vendors to make sure supply meets demand and the product or service gets to the consumer quickly. These are ways the product itself is affected by distribution.
The price of the product is affected by cost and availability. The price of a product will increase when there is a shortage. The price of a product will increase when the cost goes up due to shipping and storage costs.