Introduction
A distribution strategy in any marketing firm is completely important and vital to the business. It mainly entails the mode or method the firm uses to deliver its goods and services to its customers. How these products are distributed is reliable to the entry strategy of the firm involved. Before settling for a certain distribution system, it is wise to examine a typical distribution process, how its structure varies in different countries, and how appropriately distribution strategies vary from one country to the other. If a firm manufactures a product in its country, it has the ability to sell directly to the customer, retailer, or manufacturer. The same case applies if it manufactures products outside the country whereby it may choose to sell to a special agent to deal with the wholesalers, retailers as well as customers. The distribution systems may vary worldwide due to: channel length and exclusivity, retail concentration, and channel quality. In retail concentration, it can either be concentrated or fragmented where, when concentrated, few retailers supply to most of the market, making them own a large share of the market. A fragment retail system refers to one where many retailers are supplying to the market, meaning a single retailer has a small share of the market. Channel length refers to the number of middlemen between the manufacturer and the consumer. In a concentrated retail system, the channel is shortly preferring to deal directly with retailers, unlike in a fragment retail system that lengthens the chain hence a higher expense. When dealing with channel exclusivity, an exclusive channel of distribution is involved making it difficult for outsiders to access since retailers prefer to deal with products of established manufacturers with a national reputation to gambling on products of unknown firms. Channel quality refers to the expertise or skills of retailers and the ability to sell products of international businesses (Dent & White, 2018).
When choosing a distribution strategy, it is important to consider the relative costs and benefits of each alternative, which vary according to the four factors discussed above. The choice of distribution strategy goes a long way in determining the type of channel the business will use to distribute its product to potential customers. The longer the channel, the higher the general markup resulting in a higher price in the final product, which is incurred by the final consumer. To ensure that products' prices are not hiked, it is wise to use a shorter channel, especially where the price is a competitive weapon, and the firm does not intend to interfere with its profit margins. However, there are benefits of using a long chain of distribution, especially where an international business intends to distribute products in a country with a fragmented retail system and a short-chain in countries with concentrated retail systems. Also, a longer chain is efficient where there is an exclusive channel since import agents may have long-term relationships with wholesalers and retailers making it easier to convince them to carry the new firm's products. Also, if the channel quality is poor, a firm should consider upgrading the quality of the channel or coming up with its own distribution channel. In this case, where the Disney Company wishes to expand Disney further from the United States to Greenland, I would consider the usage of a distribution strategy that involves a short channel of distribution to maintain the cost as well as to be in contact with customers. With a shorter distribution chain, it will be easy to educate the customers on the technicality of the product as well as provide good services where the customers offer the specification of how he or she wishes to receive the product. I would also consider while exporting involving an agent who is in touch with wholesalers who, through retailers, can provide the customers with the product (Moretti, 2018).
References
Dent, J., & White, M. (2018). Sales and marketing channels: How to build and manage a distribution strategy. Kogan Page Publishers.
Moretti, L. (2018). Distribution strategy: The BESTX® method for sustainably managing networks and channels. Springer.