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In business, entrepreneurs have to set up perfect supply chain strategies in order to ensure their goods and services reach the customers in good condition and in a timely manner. Distribution strategy is involved with ways in which a business premises should undertake its operations in order to create a competitive environment through evaluation of cost benefits of a selected operation. In order to achieve the defined goals and objectives, managers plan good business strategies regarding what they should offer, when to offer, and where to offer a product (Happek, 2005; Gonzalez, 1997). Moreover, customers are very important in a business since they depict the outcomes of a given enterprise therefore; fulfilling customer needs means succeeding in a business. Survival in a business environment is through understanding all aspects of marketing that include consumer desires, competition, and good logistics. The diagram below shows contributors to a perfect distribution strategy.
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Quality improvement and productivity Competitive pricing
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Timeliness &reliability of deliveries Ease placing of orders Accuracy of Shipment
Higher profits
Reduced cost turnover Reduced cost of acquiring new customers
Figure 1: Diagrammatic representation of factors that lead to an effective distribution channel
Distribution strategies
Distribution strategies are highly essential in an organization since it is the key to successful implementation of strategies, and achievement of objectives. Coming up with a perfect distribution plan is the main entry to a successful business since the plan forms a mechanism for directing and coordinating the marketing efforts (Kotler & Keller, 2009). According to Kotler, distribution strategies in every organization consist of two levels, the strategic level and tactical level. Strategic level is involved with determining the target marketing decisions, value propositions, and analysis of marketing opportunities. The tactical level deals with the product features, promotions, merchandising, pricing, and sales channels. On the other hand, to come up with a strategic marketing plan, several steps are followed that support the company in establishing the best distribution method to adopt. The first task is defining a business mission, and objectives. Secondly, there is a need to know the growth opportunities, and then formulate product-market strategies. In addition, a distribution strategy should include capital resources, and eventually develop strategies for business reformulation and recovery(2009).The distribution strategies include carrying out different analysis that include; organization analysis, competitive analysis, and customer analysis.
Organization’s internal analysis
While developing the distribution strategies, it is essential for an organization to carry out an analysis of the activities that assist in product development.Value chain analysis has been widely used as a means for describing the activities within and around an organization, and relating them to an assessment of the competitive strength of an organization. Porter’s Value Chain is based on the process view of companies whereby a manufacturing organization is viewed as a system, incorporating some subsystems made of inputs, process, and output. The transformation process and output is concerned with creation and use of resources, that is, money, labor, and management. The methods used by an organization to carryout value chains determine its effective input in terms of cost and output in terms of profits. In the process of converting inputs to outputs, most companies make use of thousands of activities, which can be classified as primary activities and secondary activities as shown in figure 2. Porter Value Chain assists people in an organization to know their roles in that; it gives a guide on various job descriptions from the top management to the low class employees. On the other hand, Porter Value Chain makes activities in an organization run more efficiently and in an organized manner (Porter, 1985).
Figure 2: Porter’s Value Chain activity analysis
Competitive analysis
The case concerns Milliken Company that was almost driven out of its business because the price of imports was getting low. The company strategy concerns should contain static and dynamic competition goals. Static competition is concerned with competing for the present while dynamic involves competing for the future. According to Gale Bradley & Wood Robert, competition in a business occurs in many different forms developing form a variety of competitors, thus increasing challenges (1994). The successful positioning of an enterprise, good allocation of resources, and making a decision on the appropriate level of performance in a competitive environment are the key factors to consider while designing a distribution strategy. On the other hand, a skillful business and competitive analysis is needed in order to determine the competition nature of the firm in relation to delivering value to its stakeholders. For static competition, the firm should have knowledge of current competitors, product market scope, geographical scope, and vertical scope (Gale Bradley & Wood Robert, 1994)
Customer analysis
Customers are the source of profit for an industry; therefore, their environment should be well viewed at carefully to avoid certain incidences, which might be of risk to them. Organizations dealing with production of highly demanded products, like vehicle manufactures, always face stiff competition. Such an organization may lose 100 percent of its customers due to a small production error. Proper location and description of a product is very essential in attracting customer’s attention. In addition, consumers can easily identify and locate the source of the products they are using, because all the suppliers are registered and their information is on the internet. Adoption of the law can also pose some of the shortcomings, in the case where the consumer represents misleading information concerning a certain organization leading to its closure. The business environment is global meaning macroeconomic factors from all over the world sometimes have impacts on businesses in different parts including small businesses. The modern environment has consumers with varying lifestyles and values from time to time. This affects the consumers and target market needs since it affects their tastes and preferences and thus the business managers have to keep up with the changes to meet maintain their customers and attract others (Moore &Pareek, 2010).
Market product focus
Brand marketing preparedness and awareness calls for the organization to monitor the environment closely in order to discover a need for implementing communication strategies. The organization needs also to understand its culture and context of operation. Finally, the organization should endeavour in undertaking an extensive consultation with all stakeholders. These steps help the organization to identify communication need and to adapt it effectively. Communication design is a crucial step for acceptance of change in an organization. This calls for effective staff participation, communication of the objectives and vision of the organization, and providing training, as well as support to marketing and communication agents for the organization. The organization should also embark on seeking feedback concerning the plans, and recognizing, and rewarding, positive developments generated from these implementations (Proctor, 2000). Development of a correct distribution strategy is essential for every business. Distribution strategy helps businesses to concentrate and utilize the available resources and opportunities to realize profits and become competitive in the market (Armstrong and Kotler, 2008).
Creating a range plan
A range plan gives a framework for setting out the content of a collection of range in term of product. The range plan gives the merchandise mix of different collections, the breadth of these collections, and their depth. Table 1 shows a range plan using a concept of product ready for marketing. Figure 3 shows the flow diagram of product development.
| Activity | Activity |
| Research | Reviewing the past season activities |
| Concept | A review of research and current trends |
| Product development | Development of financial plans |
| Sourcing | Making decision on delivery |
| Manufacturing | Reviewing of the final options |
| Shipping | Monitoring deliveries to budgets |
| Warehousing | Making decision on location and product storage |
| Distribution | Authorizing delivery of products in stores |
| Retail | Reviewing product performance |
| Carrier bag | Sale to customers until the end of season |
Table 1: Concept to product production flow plan
The model in figure 3 shows the creation process, delivery process, and selling of a new product. The balance between product and finance is achieved through adding details in each step as shown in table 1.
Figure 3: product development flow process
The range plan consists of different columns. The lifecycle plan shows how long the given product will be offered to customers. It is very important to consider the product life cycle when designing a range plan, and this is the responsibility of the merchandiser. A product life cycle has characterization of four sequential stages in a marketing environment. These are introduction of the product into the market, growth of the product, gaining of maturity of the product, and decline of the product in the market.
Recommendations
Logistics play great role in development of a good distribution strategy for a given product range. Good customer services will lead to enhanced customer loyalty, increased referrals, support of price premiums, and reduced operating costs (Novich, 1990. p. 51).All businesses need to know their target targets behavior and buying attitudes and needs. This will help to determine what exactly the customers expect to get when they purchase goods or services. It is easier to satisfy and delight customers when their true and perceived needs are known than when they are unknown. In achieving the above, a good supply chain strategy should be developed that aims at achieving the set goals and missions. Big organizations should implement their plans in a professional manner to avoid other firms in the same line stealing all its customers. All efforts and activities in a business should have unity and focus on giving customers what they demand (Lewis, & Slack, 2003).
On the other hand, marketing characteristic is also dependent on critical success factors. Moore and Pareek (2010) claim that, internet support by technology, has led to a cost-effective means of marketing that aims at interacting with the potential market, which could be one individual. Therefore, web marketing is more of direct marketing than mass marketing. In the interaction process of the internet, it involves one individual, although, the individual may gather pals around. This results in conveying the information directly to the individual. In addition, the individual may send the link to friends, and when they open, direct marketing occurs since the target person gets the information very fast. This form of marketing leads to development of customer loyalty and obtaining immediate customer feedback. However, web-marketing strategy results in mass marketing since many people end up receiving the conveyed information.
References
Armstrong, G, & Kotler, P. (2008). Principles of Marketing. Pearson/Prentice Hall.
Gale Bradley T, & Wood Robert C. (1994). Managing Customer Value: Creating
Quality and service that customers can see. United States of America: The Free Press.
Gonzalez, M. (1997). “Synchronized Strategies.” Journal of Business Strategy. pp. 9-11
Happek, S. (2005). Supply Chain Strategy: The Importance of Aligning Your Strategy. United
Parcel Service of America, Inc. Retrieved from:
Kotler, P. & Keller, K. (2009). Principles of Marketing. The
Thirteenth Edition, Pearson Publishers
Moore, K, &Pareek, N. (2010). Marketing: The Basics. Second Edition. 2 Park Square, Milton
Park. Routledge.
Novich, S. N. (1990). “Leading-Edge Distribution strategies”. The Journal of Business Strategy.
- 48-54
Porter. E. (1985). Competitive Advantage. New York: The Free Press. pp 11-15.
Proctor, T. (2000). Essentials of Marketing Research: Pearson Education Limited, Essex.
- 54-55
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