Management

Your task is to determine which distribution strategy is best for the company.
Choose a solution and in one paragraphs make a clear and specific recommendation based on the readings in the class so far. In a second paragraph, describe how the company can implement your recommendation. Write your recommendation/implementation in third person. Include a cover page.

At the end, discuss the questions that are presented below.

Answer the following questions:

What did you find challenging in completing the scenario (i.e., information network layout, etc.)?

How does this additional information factor into effective distribution strategies?

Provide your response by uploading a Word document. Use this format:

Recommendation for Distribution Strategy

Implementation

Questions

ANSWER

Distribution Strategies

Distribution Strategies

Beverage B (BvB) is a startup non-alcoholic drink producer based in Hartford, Connecticut. BvB makes and distributes carbonated soft drinks, fruit juices, bottled water, and tea drinks. The uncompromised quality of its products has enabled BvB to enjoy fruitful relationships with retailers and consumers alike. Consequently, the management intends to stretch its market reach from the current Eastern region of the US to cover the whole country. This new venture would require a tremendous circulation system with a suitable distribution strategy.

Recommendation on the Distribution Strategy

The Need for a Distribution Strategy

The fast-paced nature of the contemporary business environment necessitates an appropriate distribution strategy for a competitive advantage.  The fact that BvB is targeting a nation-wide market implies that it must first undertake rigorous marketing of its products. However, the company cannot market its products and fail to deliver them to the consumers duly and timely (Guo & Heese, 2017). Such a failure would translate into loss: the funds wasted on marketing and the missed opportunity to garner profit from the already stimulated market.  The company would also suffer from losing its brand value when the demand for its products outweighs supply.

The Appropriate Distribution Strategy

BvB’s distribution strategy should cover three principal aspects of product flow. One, it should provide a framework for getting its products from the point of manufacturing to the end consumer. Two, it should offer a framework for conveyance that minimizes costs and saves lead time. Lastly, it must be a strategy that builds a competitive advantage for BvB.

Meeting the above-mentioned aspects of commodity flow would require BvB to leverage an intensive distribution strategy. The intensive distribution strategy is a product dissemination approach whereby the manufacturer uses numerous ways and places to display its products (Hosseinpour, 2018).  This strategy will enable the company to enjoy extensive coverage of the national market because it will use all the available outlets. It is noteworthy that BvB deals with very common commodities in the market, implying that many alternatives are available. Therefore, if a customer fails to access the BvB brand, they would still be at ease of buying another brand.  Based on this situation, BvB must push its operations towards a vast distribution of its products. This is where intensive distribution strategy comes into play.

The ease of finding the product on the consumer end translates to higher chances of profitability from the company’s end. It implies that any outlet that a customer can consider for the purchase of such products should be considered as a distribution outlet (Hosseinpour, 2018). For instance, traditional brick and motor stores or psychical showrooms have long been the primary distribution outlets for companies such as Coca-Cola and Pepsi. However, the advent and recent rise in digital technology have seen a massive consumer switch to the internet for the purchase of consumables. It follows that e-commerce might as well be leveraged as an outlet for the distribution of BvB’s products to end customers who purchase the products online. To this end, BvB’s intensive distribution strategy will be based on multiple channels of conveyance.

Implementing the Intensive Distribution Strategy

The intensive distribution strategy will be implemented through both direct and indirect distribution channels. The direct distribution channels will require BvB to sell and send their beverages to consumers directly. This approach will be utilized for business-to-business (B2B) deliveries, where the orders are specified, and the distribution is built on certainties (Chennamaneni et al., 2017). BvB should use an e-commerce website from where interested companies can make their purchases online. For clients that are less tech-savvy clients, the company can make direct distributions via product phone orders and catalogs. The direct approach will require BvB to set up warehouses, delivery vehicles, and staff to facilitate organized distribution.

The company will also use indirect distribution channels to convey its products to a diverse and unspecified customer base. Primarily, this approach would require BvB to add third party organizations or ‘middle-men’ to help get the products to the clients. The middlemen are effective conveyors and can effectively place a large number of items to numerous retail locations (Chennamaneni et al., 2017). Some of the indirect distribution channels to consider include wholesalers, retailers, franchisors, and paid distributors. The third-party distributors can package the BvB’s products together and create more attractive product outlooks that increase the chances of sales.

Reflection

To complete this scenario, I found it challenging to select a distribution strategy for the selected business. A possible explanation for this challenge is the fact that even for a smaller business, distribution depends on a host of factors, each of which offers more support for one distribution strategy than the other (Mulky, 2013).  For instance, the item type can support the use of a direct distribution strategy, but the demand and other market forces may compromise the use of that strategy.

Together, these factors contribute to the understanding that no given distribution strategy can sufficiently address all the marketing needs of a company. On this account, it is appropriate for BvB to remain flexible with the distribution operations depending on the most important market needs.

References

Chennamaneni, P. R., Desiraju, R., & Krishnamoorthy, A. (2017). Advance sales of services: Using direct Versus Indirect channels. Journal of Service Research, 20(2), 135-151.

Guo, S., & Heese, H. S. (2017). Product variety and distribution channel structure. International Journal of Production Research, 55(12), 3392-3410.

Hosseinpour, A. (2018). The Analysis of Intensive Distribution Approach. Journal of System Management, 4(2), 67-78.

Mulky, A. G. (2013). Distribution challenges and workable solutions. IIMB Management Review, 25(3), 179-195.