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Soda - Essay Example

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Most producers prefer using intermediaries to market and distribute their products and this is normally achieved through the establishment of a marketing channel (distribution channel). A marketing channel is a set of organizations that are interdependent in nature, responsible…
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Soda
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Download file to see previous pages Given that the company we are dealing with is a multinational, different strategies are used to distribute the soda depending on the specifications of that particular segment.
The soda is normally distributed using the five main distribution channels namely: Vending, Food stores, convenience & gas, fountain, and mass merchandisers. Supermarkets being the principal customer for soft drink makers are highly fragmented although it will be one of the main channels we are going to exploit. We will use them as one of the channels to get to the clients because they have a big customer base owing to the heavy flow of traffic. The problem with national mass merchandising is that they have a big bargaining power which significantly reduces on the profitability of soda. This is also coupled with the fact that their loyal clients expect discounts in order to continue using their services. Low prices means less profits although this is a channel that is crucial for us especially in terms of marketing our product and establishing a market niche (Keller 114).
The fountain sales are equally less profitable just like the national mass merchandising but we will consider it as paid sampling. This channel is a little tricky because the buyers at major fast food chains often stock products from one producer in order to have a stronger bargaining power. The effect is that the sales volume will be high although the profitability level will be low owing to the relatively big percentage of the sales going to them. However, this is a very important channel for us because it will help us in building our brand and developing customer loyalty. This is the reason why we will invest in fountain equipment and cups used to serve the sodas in these outlets.
The most profitable channel of distribution for soda is vending because we will be able to sell directly to the clients without using any ...Download file to see next pagesRead More
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