DISTRIBUTION STRATEGIES

Distribution refers to the physical and legal path that products follow from the point of production to the point of consumption. In the 4Ps, distribution is referred to as place.

B. Deciding Whether to Standardize

Distribution is often the marketing mix variable that firms find the most difficult to standardize. This is because each country has its own national distribution system that is historically intertwined with its cultural, economic, and legal environments. Other factors that influence standardization of distribution include restrictions on the size of stores and their hours of operation, the financial ability to carry large inventories, and the efficacy of the national postal system.

C. Choosing Distributors and Channels

Just as in the case of production, a firm may choose to handle the distribution function internally or outsource it to a specialized provider. When sales volume is low, it is usually more cost effective for a firm to contract with an external distributor. On the other hand, distribution may be handled internally when sales volume is high, when the firm has sufficient human, capital and financial resources, and when after-sales service is extensive and complex.

When a firm choose to contract with an external distributor, criteria for selecting distributors include financial strength, good relationships with their customers, the state of a distributor’s equipment, facilities and personnel, and trustworthiness.