Distribution Channel Analysis

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According to Porter (1991), a channel of distribution is the route along which goods and services travel from producer/manufacturer through marketing intermediaries such as wholesalers, distributors, and retailers to the final user. In the past, most companies did not think that the distribution channel as relevant component of their marketing mix (4Ps). But now, distribution channel strategy is increasingly concerned and becomes the heart of competition for an organization (Porter, 1985). It is one of the most important aspects to improve organization of distribution system and performance for the firm. Distribution Channel is a Sustainable Competitive Advantage Strategy: Due to the rapid development of technology, it is not too difficult…show more content…
Internal factors that can affect the indirect distribution channel. There are two type of internal factors, are consistent with this study, that can affect the indirect distribution channel of the firm from previous researches related to this study: - The factors related to the distributors themselves such as location, store dimension, store characteristics, and attitude of distributors. - The factors related to the firm are customers (wholesalers and retailers) services refer to logistics system and distribution intensity is another factors effects the indirect distribution channels. 2.4.1. The factors related to the distributors Location Location is a critical element of corporate strategy; it is also a major factor for the firm’s success (Ghosh and McLaffer, 1987). Most marketing composition preferred the ‘place” concept in 4Ps rather than location itself. There are some evidences showed that the convenience of location was important for retail stimulation (Arnold, Oum, Tigert 1983) because it could attract customers to purchase in the store depending on the geographic distance, road distance, travel times and costs (Brown,…show more content…
Those aspects were consisted of: 1) Personal contact quality: customer service personal was knowledgeable, empathized with unexpected situation, negotiation, and help solve problems. 2) Order released quantities: product availabilities when ordering 3) Information quality: customer perception of the information provided by the companies, regarding products from which customers might choose. 4) Ordering procedures: the effective and easy way to make an order 5) Ordering accuracy: right items, the correct number of items. 6) Order condition: no handling lack of damage during the order process. 7) Order discrepancy handling: how well firm corrected any due to order arrangement such as return or exchange products. 8) Timeliness: order arrived at location as promised, the length of time between order placement and receipt. Distribution intensity Distribution intensity can be understood as the number/ratio of stores which used by a firm within a trade area. It also refers to the extent to which a firm uses numerous wholesalers and retailers in each target trade area to carry their brand (Stem, El-Ansary, and Coughlan,

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