Distribution Channels and Marketing Analysis

[Md. Anikuzzaman]

Think of a distribution channel as one slice of the overall marketing pie. It is how a company gets its products or services to the consumers. A channel acts as an important part of your small business's overall marketing strategy and is one of the "Four Ps" of marketing -- product, promotion, price and placement, or distribution. When conducting a marketing analysis, it is important to take a look at this segment to ensure that you are using the right channels to get your product to your buyers.

Distribution Channel
Distribution channels include wholesalers, e-commerce websites, catalog sales, consultants, a direct sales force who sell over the phone, in person or both, dealers, home shopping networks and retailers. The distribution channel or channels selected can dictate what the rest of the marketing strategy would be, as they influence the buyer directly. Advertising and other marketing methods would then appeal to the buyer's demographic. Small businesses with limited resources or financial support must perform a careful market analysis to determine which distribution channel is best suited for their customers.

Marketing Analysis
Conducting an overall market analysis helps determine the target demographic and demand for your products, as well as your competitors and their distribution channels. Analyzing the market will also help determine competitive pricing for the product and the best distribution channel or channels. From there, companies can create their marketing strategy based on the information gained. This includes whether to advertise in traditional media, online or both; conduct promotions or giveaways; try guerrilla marketing tactics and other ways to reach the target buyers. Thereafter, conducting regular marketing analysis, reviews of how effective the marketing strategy is based on sales and interest in the product, will help companies figure out whether their marketing strategies are working or whether they need to reconsider how they are promoting the product.

Marketing and Distribution
The best promotion or marketing, however, won't get the product bought if it is being sold or distributed in the wrong place. For example, a company that makes skis that has its flagship store in a warm locale probably won't move many products because the demand isn't there. The distribution channel should be matched against its buyers. Once businesses determine where their customers are, they should make sure to have their distribution channel flow directly there. So a small company selling skis might open a retail shop near ski resorts as opposed to the middle of a city, far from resorts. It might not be possible for small companies to use all the distribution channels available, from a retail shop to a catalog sales to direct sales, because they are unable to pay to run all of them. Small companies will need to select the best distribution channels they can afford to keep open.

Selecting the Best Channel
Small business also should take into account how their buyers want to receive their products. Do they want to buy online, talk to direct sales reps or browse in a store? Once that's determined, the company should figure out whether to sell directly or through a marketing intermediary such as retailers or wholesalers by estimating which one would bring in the most profit. They can do so by using market data that shows the number of potential sales, plus the price per product minus the cost of distribution.

Source: http://smallbusiness.chron.com/distribution-channels-marketing-analysis-60985.html