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The Marketing Mix: Distribution Channels (Place) - Essay Example

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The business world in the 21st century has become globalized. Customers worldwide have gained access to vast amounts of information and product selection due to the internet. Different products and services require the use of alternate distribution channels…
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The Marketing Mix: Distribution Channels (Place)
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The business world in the 21st century has become globalized. s worldwide have gained access to vast amounts of information and product selection due to the internet. Different products and services require the use of alternate distribution channels. The distribution channels of a company are part of the place marketing mix variable. Companies can use different channel options. Three channel options are direct marketing, sales forces, and vertical marketing systems. Two products that require different distribution plans are automobile and canned foods. The purpose of this paper is to describe the different distribution channels options for automobiles and canned food products. The automobile industry is an oligopoly. In an oligopoly there are few firms participating in the market structure. In the United States the three companies that compose the Big Three are General Motors, Ford, and Chrysler (Optimizationweek, 2004). General Motors has released some very innovative products that have the capability to captivate the imagination of the global community. The GM Volt is a hybrid automobile that has the capability under certain conditions to reach a fuel economy rating of 230 miles per gallon (Valdez-Lapena, 2009). GM can utilize different distribution channel strategies to penetrate global markets. A strategy that can very cost effective for the company is direct marketing using e-commerce tools. E-commerce has become a very profitable marketplace. According to Plunkett Research (2011) the US ecommerce marketplace in 2010 was $153 billion. The company can adapt its corporate website to have capability of being translated to any language spoken in the world. The website must be customized to meet the needs of the customers in any of over 200 countries in the world. A second potential strategy that General Motors can use to penetrate a foreign region is to form strategic alliances with local corporations. The firm can formulate marketing alliances with established online vendors such as AutoTrade.com. Another approach the firm can utilize to establish a physical presence in a foreign location is to form an alliance with auto dealerships of used cars. Used car dealerships typically do not have any legal constraints that would prohibit them from selling GM autos. The store would have to liquidate a lot of inventory through a blowout sale to make room for the new GM autos. GM can offer attractive trade in offers to attract used car customers to the new car marketplace. The use of an experience sales force in the car industry that knows the customs and culture of the foreign location would be very beneficial for General Motors. A third strategy the company can utilize is acquisition of dealerships to make them wholly owned official GM dealers. A company that has been very successful at selling soup products is Campbell’s Soup. Canned foods are a non-perishable food product that can be conserved for long periods of times. This attribute should be exploited by the company. The firm should start an aggressive direct marketing campaign to sell the soup online to customers in large supplies. The firm can offer a discount for a monthly supply of soup for a person. Higher discounts can be offer for monthly supplies for any size family. This strategy can be used to effectively create customer retention. A second distribution channel that can be used by Campbell is to sell their products to intermediaries such as supermarket chains. A good supermarket chain in the UK that the company can target is Sainsbury. A third distribution strategy is to sell Campbell soups to foreign warehousing companies dedicated to the distribution of food products. These types of companies have large portfolio of clients that can help Campbell achieve faster penetration of the marketplace. There are differences and some similarities in the distribution strategies to sell automobiles and canned soups. The analysis showed that both products could be sold using direct marketing strategy, but with different approaches. The auto company is looking to sell one car to a new customer, while the canned soup company wants to get a customer to become a daily user of canned soups. The proposed distribution strategy for cars and canned soup had a lot of disparities. The car manufacturer was looking to penetrate by generating separate deals with used car dealership. These deals involve creating an intimate business relationship. The canned foods product used established distribution channels via an exporting strategy. The car dealership is looking for a greater market presence than what is required for a food product such as canned foods. Due to the fact that cars are expensive items car companies are looking to expand to more marketplaces to increase their customer base. Canned foods are a food product that can be consumed by any of the 6.92 billion inhabitants of earth to meet their nutritional needs. References Optimizationweek.com (2004). Big Three Automakers in Online Slow Lane. Retrieved May 21, 2011 from http://www.optimizationweek.com/reviews/automakers/ Plunkett Research (2011). Ecommerce & Internet. Retrieved May 20, 2011 from Plunkett Research database. Valdez-Dapena, P. (2009). Chevy Volt to get 230 mpg rating. CNN Money. Retrieved May 21, 2011 from http://money.cnn.com/2009/08/11/autos/volt_mpg/index.htm Read More
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