Discussion #1
The modern market in any area is overwhelmed with offerings. In other words, a customer can choose from a number of propositions and channels of distribution (ReferenceForBusiness.com, 2000). Today, we can purchase goods in so many ways that sometimes we are confused by this variety of choices. The following channels are available for the distribution of nearly any product on the Australian market (Rosenbloom, 2004):
1.Manufacturers -> consumer (through Internet directly).
2.Manufacturers -> TV shopping -> customer.
3.Manufacturers -> own stores (showroom) -> customer.
4.Manufacturers -> retailer (supermarket, electronic stores) -> customer.
5.Manufacturers -> wholesaler -> retailer -> customer.
Before reviewing the channels, we are to evaluate briefly each phase (stages 1-3) of making channel design decision before actually creating one (stage 4). Thus, stage 1 is about recognizing the need for a channel design decision: in our case, we have a new product that needs to be distributed over the new channels because the old ones will not provide necessary return. Therefore, we need to create a new channel to sell a new product. It will allow us to consider all peculiarities of the new product to distribute it with maximum efficiency.
Stage 2 addresses to the need to determine distribution objectives and align them with marketing and general objectives of our enterprise. Therefore, our distribution objectives are as follows: to attract potential customers via the appropriate distribution channel; to set competitive price; to gain competitive advantage, offering the product exclusively; and to maximize sales and gain market share. As we can see, these objectives are aligned with the major goal to promote Personal Mini GPS Tracker on the Australian market as new exclusive but rather affordable solution.
Finally, stage 3 specifies the distribution tasks. We have specified the distribution tasks for our case as follows: it is necessary to evaluate the market in terms of understanding the target audience of buyers (protection of the child/elderly/disabled/pet etc.; personnel management; vehicle/equipment tracking; etc.); develop promotion campaign (the Internet, local stores show rooms, etc.); create appropriate storage for at least minimal stock; develop brochures and promotional banners with main features of the device; develop the appropriate price to compete with rivals; develop the appropriate order processing procedure; arrange logistics and payment methods; guarantee warranty service; organize return procedure and repairs, if necessary. Completion of this stage provides us with a plan of further actions that we are to perform on stage 4 – the development of possible alternative channel structures.
Discussion #2
Now, let us review briefly each of the items, stated on the first page. Goods can be sold directly from a manufacturer to a customer over the Internet, eliminating such expenditures as offices, showrooms, warehouses, logistics, etc. This is one of the most advanced channels of distribution now. It has numerous advantages: the price is usually lower than in stores; customers can choose from different Internet stores at a time; there are no physical (geographical) boundaries that could mitigate the freedom of choice for customers; it is very convenient because online shopping can be performed from any device …