Saturday, March 30, 2013

Response to Kaley's post on Channels of Distribution

'Do you feel one channel of distribution could be more beneficial to a company or will it always vary depending on the product, service, or company?'

I believe that it can always vary based on the product, service, or company; but also I believe their will always be those companies where one channel of distribution works the best for them. Companies with that one channel have found enough success using it, would not have to worry about adding another channel to improve the business.  Also they may not have the means to create another channel another either. Telemarketing, mail-order and catalog shopping, shop-at-home television networks, and online shopping are examples of direct channel distribution. These are usually successful companies employing just one channel and managing to stay relevant. It proves that utilizing just one marking channel can be successful.

Can you think of a company that successfully utilizes all four marketing channels? (direct, retailer, wholesaler, and agent/broker)

Marketing Channel Discrepancies

Marketing channels aid in overcoming discrepancies which concern quantity, assortment, time, and space created by economies of scale in production. A discrepancy of quantity is the difference between the amount of product produced and the amount an end user wants to purchase. This is countered by storing and distributing the product in the appropriate amounts that the consumers desire. A discrepancy of assortment occurs when a consumer does not have all the items required to receive full satisfaction from a product. To overcome this, marketing channels must assemble many of the products necessary to complete a consumer's needed assortment in one place. Temporal discrepancies occur when a product is produced but a consumer is not ready to buy it. Inventories must be maintained in anticipitation of demand in order to prevent this. A spatial discrepancy is the difference between the location of a producer and the location of widely scattered markets. Marketing channels overcome this by making products available in locations convenient to customers.
To me it seems like the discrepancy of quantity would be the hardest one to manage and would be the one to occur most often. I feel like companies tend to overstock their inventories, especially when they may be first starting up. When a company first opens a new store or introduces a new product it could have a difficult time in determine how well to stock products. This would easily result in the company having more product than is desired by the consumers.

What do you think is the most difficult marketing channel discrepancy to overcome?