BUS 201 Eastern Gateway Community College Chapter 12 Distribution Strategy Discussion

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BUS 201

Eastern Gateway Community College



Discussion Question Chapter 12: Distribution Strategy


Write a post for the Discussion Forum on this topic, addressing the questions below. You may use either a written paragraph or bullet point format. Part 1 should be 2–3 paragraphs in length or an equivalent amount of content in bullet point form. Responses to your classmates’ posts should be 1–2 paragraphs or several bullet points in length.

Part 1: Distribution Strategy

What is your current distribution strategy? What missed opportunities or disconnects are you seeing in this distribution approach? Make recommendations about your future distribution strategy based on the following:

What are the best distribution channels and methods for you to use, and why?

Will you have a retail outlet and if so, where will it be located?

  • In what geographic area(s) will your product/service be available?

Post 1

First peer response belowMcDonald's current distribution strategy is to use the retail channel. McDonald's does not make any of its own products, as it contracts with suppliers to meet this requirement. Some of McDonald's suppliers include Tyson Foods, Lopez Farms, 100 Circle Farms, Gavina Gourmet Coffee, Hildebrandt Farms, and many others. The only missed opportunity I can see would be to possibly try to move to a more direct channel in certain areas of the business, to increase profits and have more control over products. However expanding to one of areas such as the production of meat, raw supplies, and soft drinks are not the line of business that McDonald's is in. McDonald's already has a proven business and I think it is best to stick to what is already successful for them and not move into other areas of the industry.The best distribution channel to use is the retail channel, which is the one currently utilized. McDonald's is in the food service industry, and does best by taking food supplies from manufactures and producing meals out of them. The company is not in the supplies manufacturing industry, such as producing meat, milk, grain, breads, vegetables and condiments, and soft drinks. These areas are a whole different industry being the food production industry, and not the food service industry. McDonald's does not have a retail outlet, but does have many restaurants and kiosks located globally. McDonald's operates in a variety of geographical areas globally, from cities, to towns and suburbs and even some rural areas.       

Post 2

Second peer response belowLego is present in around 130 retail stores around the world, most of which are present in the U.S. Retail stores are not the only places that carry the selection of Lego toys, but you can buy them at movie theatres, amusement parks and popular departmental stores and toy stores. The toys are exported throughout the world so that the toys are made more accessible to the people.[1] Lego is sold in stores and online with ease. It is beneficial for Lego to be utilizing the online market and reduced cost shipping through places like Amazon or big box retailers’ websites.Lego does have a retail outlet. Lego has stores in many malls across the world. Some of the stores are smaller, and some are large where customization can take place and you can play with Legos while there.It is hard to pinpoint one geographic location, so they will continue to be across the world. The size of the stores is based on traffic. For instance, there is a store in Washington DC mall. The store is in a 1500 square-foot space. This location does well and has much foot traffic, however it is nothing compared to the Lego store located at Mall of America, which takes up quadruple that space and has a rotating selection of life-size or larger Lego creations.[1] https://www.mbaskool.com/marketing-mix/products/17...          

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Place: Distribution Strategies Principles of Marketing Distribution Channels Distribution channels cover all the activities needed to transfer the ownership of goods and move them from the point of production to the point of consumption These activities include: • product flow • negotiation flow • ownership flow • information flow • promotion flow Five Flows Channel Partners • The producer of the product: a craftsman, manufacturer, farmer, or other producer • The user of the product: an individual, household, business buyer, institution, or government • Middlemen at the wholesale and/or retail level Channel Functions • Transactional functions: buying, selling, and risk assumption • Logistical functions: assembly, storage, sorting, and transportation • Facilitating functions: post-purchase service and maintenance, financing, information dissemination, and channel coordination or leadership Channel Structures While channels can be very complex, there is a set of channel structures that can be identified in most transactions: • Direct channel • Retail channel • Wholesale channel • Agent channel Marketing Channels for Consumer Products Supply Chain vs. Marketing Channel The supply chain and marketing channels can be differentiated in the following ways: • The supply chain is broader than marketing channels. • Marketing channels are purely customer facing. • Marketing channels are part of the marketing mix. Channel Management: Analyze the Consumer • First, to whom shall we sell this merchandise immediately? Second, who are our ultimate users and buyers? • In both cases, certain basic questions apply: There is a need to know what the customer needs, where they buy, when they buy, why they buy from certain outlets, and how they buy • Manufacturers must also discover buying specifications for resellers Channel Objectives What must the channel achieve? Examples: • Growth in sales by reaching new markets and/or increasing sales in existing markets. • Maintenance or improvement of market share • Achieve a pattern of distribution by a certain time, place, and form • Reduce costs or increase profits by creating an efficient channel Specify Distribution Tasks What functions does the channel need to perform? Examples: • Store inventory • Deliver goods • Provide credit • Handle product returns Evaluate and Select Channel Alternatives There are four considerations for channel alternatives: 1. Number of levels 2. Intensity at the various levels 3. Types of intermediaries at each level 4. Application of selection criteria to channel alternatives In addition, it is important to decide who will be in charge of the selected channels. Evaluate Channel Member Performance It is important to evaluate the performance level of the channel members, but channel members are independent business firms, rather than employees and activities under its control, these firms may be reluctant to change their practices Approaches to Support Third Party Sales Success • Understand and align incentives • Provide exceptional sales support • Create demand for your product Common Service Outputs • Special convenience: Can I get the product at or near the location where I want it? • Timing of availability: Do I need the product immediately or am I willing to wait? • Quantity: Am I willing to buy in bulk or buy multiple items? • Assortment and variety: Do I have a very particular need or a flexible need? Am I looking for one or many options? • Service: Do I require assistance or support through the purchase process? • Information: Do I need information to make a purchase? Retail Retailing involves all activities required to market consumer goods and services to ultimate consumers who are purchasing for individual or family needs Types of Retail • Online • Catalog • Franchise • Supermarket • Malls and shopping centers • Chain store • Department store • Warehouse store • Non-store (right) Online Sales are Growing, but Still Under 10% Retailers create a shopping experience through presentation and personnel Supply Chain Management The supply chain includes everything from product development, sourcing of materials, actual production, and transportation logistics Supply chain management activities maximize customer value and allow the company to gain a competitive advantage Integrated Supply Chain Management Within the supply chain organization sourcing, demand planning, inventory planning, warehousing, logistics, and order-fulfillment functions must work together Practice Question Here is a supply chain for peanut butter How would a diagram of a marketing channel be similar? Different? Quick Review • What are channels of distribution? Why do organizations use them? • How do channels affect the marketing of products and services? • What are the types of retailers? How are they used as a channel of distribution? • How does integrated supply chain management support an effective distribution strategy?
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Explanation & Answer

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Distribution strategy

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Distribution strategy
A distribution channel involves the chain of a business that allows the organization to
deliver products to final consumers. There are several kinds of distribution channels that a
company can implement. An organization can decide to sell to the consumers directly or follow
other media before finally selling to clients (Antonella, 2017). Wholesalers act as the
intermediary between the producer to the end consumer. Every means of distributing to
customers is appropriate depending on the kind of business. However, the Tesla company deals
with automotive engines mostly sold directly from the company to the end-users. The strategy
works best for the company, and it helps avoid expense...

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