- 23/11/2012
- Posted by: essay
- Category: Free essays
Enterprises in a market economy pay considerable attention to the problems of optimization of process of distribution goods from producer to consumer. The results of their economic activities largely depend on how well are the selected channels of distribution of goods, on effectiveness of forms and methods of marketing, the range and quality of enterprise services related to product sales.
The study is based on an analysis of the winery product “Wine Valley”.
Relying on the theoretical material the paper presents an action plan to increase sales by increasing distribution network of products: the opening of retail stores and the use of banner advertising.
Sales of products involves identifying and evaluating the market where enterprise operates, and external environment of the enterprise. These enables to make certain important decisions: to identify attractive opportunities, identify problems and weaknesses in the enterprise, the correct choice of effective forms and sales channel, improving the movement of goods, the choice of measures to promote the product. Effective distribution of products is a necessary condition of good operation results, as distribution is the final stage of the production process, and it brings the product to the consumer.
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Improving the distribution channel of products
Distribution channel can be interpreted as a path (route) of the movement of goods from producers to consumers. The choice of distribution channels of products is a sophisticated management decisions that affect all other decisions in the field of marketing. Sales of products, in most cases, is carried out through intermediaries, who through their contacts, experience and expertise allow to bring the wide range of goods to the target markets. (Blythe 2001)
Distribution channels can be of three types: direct, indirect and mixed.
Direct channels are associated with the movement of goods and services without the participation of intermediary organizations. They are often established between manufacturers and consumers, who retain control of their marketing program and have limited target markets.
Indirect channels are associated with the movement of goods and services from the first manufacturer to intermediary, and then from it – to the consumer. Such channels typically attract companies and businesses that in order to increase their markets and sales volumes agree to give up many marketing functions and costs and, accordingly, some part of control over the sale, and ready to somewhat weaken the contact with consumers.
Mixed channels combine the features of the first two channels of product distribution.
Merchandise marketing is a system that delivers the goods to places of sale in a precisely defined time and with the highest level of customer service. Foreign authors under the product distribution to understand the systematic planning decisions regarding the physical movement and transfer of ownership of the goods or services from producer to consumer, including the transportation, storage and transactions. (Blythe 2001)
In most cases the choice of distribution channel of product is the most important decision for the firm.
In 2008, the firm’s management decided to create a branded chain of stores, to ensure a certain independence from external factors, against the backdrop of adverse conditions, that have shown the effectiveness of this direction. The step to open branded retail shops was a very profitable decisions based on high performance of brand retailers, when the company needs to increase this capacity by expanding existing retail.
This strategic decision was made due to so important advantage for companies of this profile as the timely receipt of cash at a significant concentration in the retail channel. The main advantage of corporate retail distribution channel is the ability to obtain additional profits by trading margins.
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