Magazine article Marketing

Why Firms Get Distribution Wrong

Magazine article Marketing

Why Firms Get Distribution Wrong

Article excerpt

Most companies have to go through some form of distribution network to get to the customer. So it is a critical element in the marketing mix. But, too often, companies fail to see it this way.

Attitudes towards distributors -- supermarkets, industrial or business equipment dealers, travel agents or insurance brokers -- are really confused.

Some suppliers see them as pipelines to the market. Others see them as customers in their own right, partners or even competitors. Many companies view their distribution system as a constant around which they manipulate the marketing mix variables of product, price and promotion.

This is misleading. Distribution networks are dynamic; they evolve through a number of identifiable stages from fragmentation to concentration as they change. The illustration on page (bottom) charts the evolution of taking on quite different characteristics with extremely important implications for suppliers.

One reason why so many firms lack consistency in the way they deal with networks is that it is unclear who is responsible for distribution strategy. …

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