COURSE: MKT301 MODULE 3 CASE ASSIGNMENT
PROFESSOR: THOMAS KLEIN
PRODUCT 1: AUTOMOBILES: FORD FIESTA
PRODUCT 2: CANNED SOUPS: CAMPBELL'S CHICKEN NOODLE
In the marketing mix, place is a major element to the success of a product. For this reason, the idea of place has been significantly analyzed A major portion of this concept is that of distribution. Basically, this means how the product is transmitted to the consumer. For the producer, this involves the entire process of getting the product from the point of production into the consumers' hands. From the consumer standpoint, no ...view middle of the document...
Such is true because many consumers, not wishing to go out of their way to a second store, would find a near alternative at the location of the resale store from which Campbell's no longer sells. Profit would be greater on each sold unit for Campbell's, since they no revenue would be diverted to a reseller. Nonetheless, this decrease in convenience would almost certainly mean a decrease in overall revenue. This pattern is also visible in other areas, such as in non-traditional sales techniques including direct TV infomercials. In addition, a company may benefit in other ways if direct sales are used. For instance, with a resale model, companies might not have as direct access to build customer loyalty and relationships.
Despite this, the aforementioned financial benefit usually necessitates a resale model for most major brands. Also working in favor of the resale model is a desire to keep the corporate producer focused on product. Developing extensive distribution expertise and infrastructure can be extremely costly and inefficient. Developing dedicated stores to sell just one brand is impractical for most brands. This highlights that a major benefit of distribution channels is their ability to achieve costs savings through specialization. Most brands use wholesalers (who are intermediaries between producers and retailers) and retailers (who directly sell to the consumers) for brand distribution. There are also some specialty distribution methods. These include broker arrangements, where firms work to match together buyers and sellers, as well as franchising agreements (Tanner). With franchising, a producer agrees to license the right to sell their product to a third party, the franchisee, who then assumes responsibility for representing the brand. The typical mode of distribution can then be seen as independent, while other modes, such as franchising, are dependent: there...