Analyze the different strategies used by retailer to select a distribution channel.
A retailer today has can choose from many different formats of distribution for retail selling. The major ones of these are described below.
- Retail physical store selling across the counter: In this format sales persons interact with customers offering them specific products for sale, actively helping them to select the products to buy, ad closing the sale.
- Retail physical store with self service: In this goods and services are displayed on shelf accessible by customers and they pick and buy what they want.
- Automated vending machines.
- Mail order selling and other similar systems such as telephone selling.
- Internet selling.
A retailer select any one of these retail selling formats or a combination of more than one format.
Question - Analyze the different strategies used by retailers to select a distribution Channel
The retail segment is very diverse and includes, but is not limited to such businesses as those providing medical supplies, art dealers, lawn and garden stores, beauty supplies, gasoline, and grocery stores.
When we think of retail, the example of a grocery store and its point of sale methodology immediately come to mind. However, not all retail customer interaction fits this model. Many items are sold to the public through direct marketing (catalogs), television, or and even movable stations (hot dog stand) mail order to name a few methods.
As a result of this diversity, potential strategies will depend on the type of retail business being operated. Regardless of the type of retail establishment, a good distribution channel must first identify all the potential channel participants, for example a food distribution channel might involve
Product Delivery Companies Trucking Company)
Food Brokers (Manufacturers Representatives)
Food Service Brokers (Provide Ancillary Services)
The number of participants in a given retail segment may vary up or down. Once the potential operating environment is established, a retailer might analyze the following factors in developing a strategy:
Company Characteristics Channel Characteristics
Unique Selling Points Quality of service
Perceived competitive advantages Price
Community Good Will Labeling
Current Market Trends Timing
Current Regulatory Environment Placement
An analysis of the marketing environment along with core company goals can assist in the development of a strategy. Will goals be hindered or enhanced by a particular channel? A firm can observe record, assess and refine its strategies by utilizing internal monitors and controls, as well as customer feedback information.