Products and Services - Essay Example

China for instance has a long list of turbocharger manufacturers but according to research studies, there is still a room for competition. Target markets are U.S. suppliers like Honeywell International, Inc., Borgwagner, Inc, Mitsubishi Corp, IHI of Japan and other car making companies worldwide. According to a news of Bloomberg on July 27, 2010, the market for turbo charger auto part is fairly conservative, and the demand for turbochargers for cars grow from “50 percent to a range from 28 million and 30 million units by 2015, with a value of 4 billion euros ($5.2 billion) to 5 billion euros” because of the emission rules and fuel savings (Central turbos, com. Aug. 10, 2010).

This news further cited that car makers are looking for suppliers of turbochargers and are willing to go into a joint venture with suppliers. Distribution system Getting this product into the market requires distribution, which could be direct or indirect, and a multi-channel system. According to Gerth, David, an author who compiled lengthy notes on marketing distribution, a distribution system is “a set of interdependent organizations that help make the product available to consumers or for further use in other business.

” Some companies completely develop an alliance with its distribution channel because of the nature of its products. A channel of distribution and an alliance is needed by the turbo charger because they will perform a function here which could not be eliminated like integrating the turbo charger into the performance system of the car. It only requires a short channel length because the nature of turbocharger does not involve frequent purchases, and the product entails concentration. . For this reason, the manufacturer and supplier need to have a harmonious relationship that is called for.

An indirect distribution is recommended in this kind of product since the company will not sell directly to the consumers and customers. This is a common practice of distribution when a product is in an assembly line, and being used to supply manufacturers (Tutors,net). Under this arrangement, the company will get an intermediary to his distribution chain. These intermediaries take responsibility of the product and makes sure that it reaches the customer. Conversely, direct distribution is the process of selling goods directly to consumers.

Since the product is a car part, it will form part of the car package that will be sold to customer. A multi channel system of distribution is not appropriate for marketing the turbo charger as the product is not displayed in grocery or supermarket stores. A multiple channel system is commonly used when there are more than one distribution design or product brands. Channel members The turbocharger auto part is a type of product that requires a dependent channel arrangement because in this form of setup, channel members are “bound together” to work on a common goal (tutors.net), such that they form a stable relationship.

This arrangement is also referred to as a “Horizontal Marketing Arrangement” wherein two or more companies join together to follow a marketing opportunity” (Gerth, David).For example, the XYZ company works together with Toyota Motors to produce a turbocharged car to be sold to customers. It does not need a multi-channel distribution to reach customers. Another approach of channel