Assignment 1: LASA 2

Distribution Strategy Romeo Joson

Module 4 A2

Distribution Strategy

Distribution Channels

Length & Width

The bottled water market faces a cut throat competition globally. The intensity of the channels is used in attaining time and place utility. Competition for WCB is posed by tap water and juice and close substitutes that are represented by same products. The global concentration of the market is low. Primarily, the intensity of the channels decisions involves selecting the intensity of the channels that contribute to efficiency is imperative. The intensity of the channel distributions means having length and width of the distribution. In the last decade, there have been significant shifts in distribution and manufacturing practices. The implication is that WCB having less resource base and power will suffer during competition. Wide width and lengths are not possible as a result of rigidity on expansion of the channels

Direct & Indirect

In distribution, direct selling will involve selling and marketing the products to the consumers directly from the fixed retailer location. Peddling will be used as the oldest form of direct selling. The modern direct selling is inclusive of making sales of bottled water through party plan, personal contact arrangements, internet sales and one to one demonstration. The consumer will benefit from it since it has service benefits and convenience that is inclusive of explanation and demonstration of bottled water, generous satisfaction guarantee, and home delivery. Direct method uses multi-level marketing where a person is paid for sales and selling to people he sponsors or recruits rather than using single level marketing

Indirect Channels

Using an intermediary such as a retailer or a wholesaler are utilized to make the product available to the consumers. This is the most indirect method when there are many small manufacturers in water bottling and many small retailers. Additionally, agents are used in coordinating large product supply (Boundless, 2015)

Vertical & Horizontal Channel Conflict

This will be used in focusing the sellers and the buyers in direct contact. That is WBC will not look beyond the next level. It will focus on the framework for the whole system of distribution. VMS is a channel where a single member of the chain coordinates. The members manage the activities of the channels in achieving low cost, an efficient distribution that is aimed at satisfying the targeted market customers. WBC will use corporate and administered VMS. Corporate VMS has one stage of distribution under the ownership. Administered VMS will be used in that the members of the channel will be independent with higher inter-organization of management through informal coordination. WBC will agree to adopt the promotional activities where we will have one channel member dominating.

The channel leader will present effectiveness of the channel in regard to leadership. He must have a high channel power that comes in diverse forms such as the provision of financial benefits and being the expert when compared to others. The channel conflicts may arise when the members disagree on the best methods of achieving the goals of WBC. Horizontal conflicts may happen among the firms at the same level of the channel. That is, one dealer may complain about the other.

The vertical conflict among the diverse levels of the same channel where the producer may complain about the dealers, and the dealers may complain about the producer. The conflicts may be damaging or healthy for the channel. Healthy competition may encourage the dealers to bring improvement in their services

Promotion

Communication Process & Tools

The communication process is the means WBC will attempt to persuade, inform and remind the consumers indirectly or directly about the brand and product. The nonpersonal and personal communication is used in marketing and distribution promotion. The promotion communication mix can be done through; advertising, sales promotion, experiences and events, publicity and public relations, direct marketing, word of mouth marketing, interacting marketing, and personal selling.

Personal communication in development is categorized as the advocate communication. The sales person of WBC communication to the consumers is the communication from the products advocates. Independent communication of the expert to the potential buyers of the bottled water about product’s merit is expert communication. A neighbor saying good things about this product is a social channel communication. WBC will have to follow the following steps

· Identify the individuals who are influential and devote extra efforts for them.

· Opinion leaders will be created through supplying the feasible opinion leaders with the product on the basis of attractive terms.

· Believable and influential people are used in testimonial promotion

· Word of mouth publicity is developed by requesting the clients who are satisfied with bottled water to promote it to their friends

· Discussions communities and groups are established online

Other tools may include atmospheres, media, and events. The media tools include the print media, broadcast media, electronic media and display media. The atmosphere is what is created in the office of the environment. The exteriors and interiors have meaning to the buyers. The events are designed to present a particular message (Shimp & Andrews, 2003).

Product Life Cycle

The introduction stage of the product lifecycle is when the team in marketing put emphasis on promotion and the initial distribution of the product. The product for WBC will have few competitors at this stage. However, the sales may be small since it takes time for the market to accept to accept out product. The company will lose money at this stage.

Growth: In this stage, the market has started accepting our product, and there is a significant increase in sales. The company may fail to make improvement of the product in order to stay competitive. Still, there are fewer competitors

Maturity: The sales reaches a peak where other competitors enter the market with better solutions thus making the competition stiff. The company introducing new products may find it hard to compete in the market.

Decline: at this stage, the sales begin to decline as the product reaches the point of saturation. Many products are phased from the market due to the decreased sales since there is competitive pressure (Boundless.com, 2015)

Push vs. Pull

The pull strategy the communication will not be demanded by the buyer. Push strategy will place the product in front of the customer through an advertisement to ensure that the consumer becomes aware of the product existence. The approach works well for little impulse buy items and value items. WBC can use push strategy to increase the product awareness. The push-pull strategy, WBC can demonstrate the features of the product to customers. The retailers are encouraged to stock the product. The pull strategy, on the other hand, motivates customers and stimulates demand to seek out a particular product. It is aimed at the end users. A visible and a strong brand is required to ensure the success of a pull strategy. This can be used in advertising, CRM, referrals and sales promotion. This will create product demand.

References

Boundless. (2015, February 19). “Types of Marketing Channels.” Boundless Marketing. Retrieved April 22, 2015, from Boundless: https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/marketing-channels-11/marketing-channels-in-the-supply-c

Boundless.com. (2015, January 19). Stages in the Product Lifecycle.” Boundless Marketing. Retrieved April 22, 2015, from Boundless: https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/integrated-marketing-communications-12/selecting-the-promotion

Shimp, T., & Andrews, J. C. (2003). Advertising Promotion and Other Aspects of Integrated Marketing Communications . Cengage Learning.

Wang, Y. L., & Tzeng, G. H. (2012). Brand marketing for creating brand value based on a MCDM model combining DEMATEL with ANP and VIKOR methods. Expert Systems with Applications, 39(5), 5600-5615.