Article Review: A Customer-Focused Approach to Distribution: The Case of SANparks
A well planned distribution channel system is a key component of the marketing mix that helps meet customer demands and achieve company goals. This assignment will analyze the role channels of distribution have in meeting the needs of consumers in both a brick and mortar and online retail setting.
Scenario:
You work for a newly formed sports apparel company and your manager has requested you help the company decide on the best distribution strategy to use for its products. You have begun research on the strategies and methods available by reviewing relevant articles on the topic. Based on your article review, you will decide what strategy(ies) is/are best and explain the reasoning behind your conclusion.
Select an article that is less than five years old on the role of distribution channels in marketing.
Compose an article review covering the following:
- Define what a distribution channel is and discuss why it is important to the marketing process.
- Discuss the differences between direct and indirect distribution channels.
- Introduce the article and its author(s) and give a brief summary of its core message(s).
- Analyze the relationship distribution channels have to maintaining a satisfied target market.
- Compare and contrast similarities and differences in distribution strategies for online versus brick-and-mortar businesses.
- Use examples from a company you admire or your own work life examples to illustrate your points.
- Recommend distribution strategy(ies) for the company and what reasoning led you to conclude this was the best solution.
Distribution Strategy-Marketing
Introduction
In the marketing process, distribution channels are important. The selection of the distribution channel seems worthy of the management of the company to reach customers and meet their needs. Based on the business nature and external environment, the management has to consider an appropriate distribution channel to gain success in the competitive market. From Bricks & Mortar to online retail setting, the role of the distribution channel is to be streamlined. It seems interesting to review an article and illustrate the distribution strategy along with an effective example of the company.
Distribution Channel and Its Importance to the Marketing Process
Distribution strategy is a chain of business, which ensures the distribution of different goods to customers. Retailers, distributors, wholesalers are some important distribution channels for the company. Distribution channels are divided into two main types. These are direct and indirect distribution channels. Direct channel enables customers to buy products or services directly from the manufacturer. Conversely, the indirect distribution channel allows customers to buy from retailers or wholesalers. The distribution channel is important in the marketing process, as it is a path or route to reach customers. The distribution channel works as a marketing institution. It is an important element of the marketing mix (Place). In the marketing process, the distribution is a passage for customers to meet their needs and wants (Schlegelmilch, 2016).
Differences between Direct and Indirect Distribution Channels
Regarding the indirect distribution channel, the company sells products and services directly to customers. On the other hand, the company sells goods or services indirectly to customers through the indirect distribution channel. Indirect distribution helps the company own portability. When selling through the indirect channel, the company has to share profit margins. Initially, the direct distribution channel can be costly for the company due to heavy investments in logistics. However, after establishing a successful system, the cost can be minimized. Conversely, the cost of the indirect channel is less than the direct channel initially. However, it can be costly due to intermediaries.
A Customer-Focused Approach to Distribution: The Case of SANParks By Anneli Douglas
Article Summary
Anneli Douglas, the author of the article, has illustrated the customer-focused approach to distribution. He came up with the case study of San Park and elaborated some important considerations of the management, as far as the tourism and distribution tactics are concerned. Traditionally, the management did not give importance to customers in the distribution process. However, the South African national park has used different distribution channels to meet the needs of the South African national park along with an appropriate frequency. The company has recently depicted the shift in the distribution channels, as satellite call centers have been used as a direct distribution channel. Electronic distribution channels are becoming popular among customers, and these are quite pertinent to the modern or contemporary business era. The customer is focused on utilizing these distribution channels regarding targeting, satisfaction, and rapidness and needs. Thus, summarizing the whole article, the core message is to maintain the customer focus when making the distribution strategy, especially in the tourism industry (Douglas, 2016).
The Relationship between Distribution Channels and Target Market
The relationship between the distribution channel and the target marketing is quite visible. For Instance, time and place functions are to be controlled by customers, and accordingly, the management has to target customers. The need for the product or service may emerge in a particular area, and for meeting customer’s needs, the company can make the pertinent strategy. The distribution or placement is a part of the targeting strategy. Normally, in the brick & Mortar or inline retail setting, the company takes the responsibility to promote products to target customers. Well, the right combination of distribution channels is required to justify targeting strategy. Owning the prom option and targeting may lead towards the direct distribution channels. Moreover, when the company wants to share the responsibility, indirect channels can be utilized. Thus, the relationship between distribution channels and target market is quite strong (Douglas, 2016).
Similarities and Differences in Distribution Strategies for Online Versus Brick-and-Mortar Businesses
In the modern business era, it has been revealed that the management intends to make a customer-oriented distribution strategy. In both, brick & Mortar and online business, it seems the similarity. Both businesses have to meet customer needs. Interestingly, when running an online business, the main intention of the company is to use direct distribution channels. Direct mailing, direct selling, telemarketing, and company’s call centers and owned logistics are direct channels (Schlegelmilch, 2016). The strategy is to reduce the cost of sales to customers through modern and efficient distribution channels to come up with the low process of customers. On the other hand, the distribution strategy for Brick & Mortar is different. The company usually wants to create several options for customers at the point of sales. Retailers, wholesaler, and other strategic partners are to be considered by the company in this Brick & Mortar process to reach customers effectively. Intentions to increase sales, target customers, increase profitability, and grab customers are some similarities as well (Douglas, 2016).
Company Example
South African National Parks (SANParks) is a perfect example to elaborate the importance and existence of the different distribution channels. The article depicted the distribution system of this organization, which contains several elements. For Instance, Website, head office reservation office, call center, satellite reservation office, and satellite call centers are the main elements. Through call centers, SANParks connects with customers. Through this direct distribution channel, this organization has reduced placement limitations. When distributing its services to customers directly through call centers, the “concentration of expertise” approach has been utilized by the company. Relative to the core message of the article elaborated above, this direct channel is working with the perspective of customers (Douglas, 2016).
Strategy Recommendation
For South African National Parks (SANParks), the direct distribution channel is the best choice. However, in the competitive tourism industry, making the distribution strategy is a big challenge. The recommended distribution strategy is to make a strong relationship between customers and channel requirements. As far as the distribution process of this company is concerned, the company has to focus on the internet skills of customers. Different variables such as culture, demographics, and frequency of travel are to be considered in the distribution strategy. It looks like the pertinent approach or strategy to reach customers and make them assertiveness regarding buying behavior (Douglas, 2016).
Rational of Strategy
South African National Parks (SANParks) can rationalize this distribution strategy through gaining the sustainable competitive advantage. Through this distribution strategy, the company is in the best position to target customers effectively. The direct distribution approach has been changed through some new traits, and it is going to make the difference for this company in the competitive tourism industry (Douglas, 2016).
Conclusion
In the end, it is to conclude that the distribution strategy triggers the marketing process. The company management has to focus on the placement element in the marketing mix process. The distribution strategy should be based on customer needs, business nature, and marketing trends. Both distribution channels are effective for companies in Brick & Mortar and online retailing or services. South African National Parks (SANParks) is a perfect example, as it contained the strategic consideration when formulating and implementing the effective distribution strategy. Ultimately, an effective distribution strategy enables profitability and business sustainability.
References
Douglas, A. (2016). A customer-focused approach to distribution: The case of SANparks. South African Journal of Economic and Management Sciences, 19(3), 413-431.
Schlegelmilch, B. B. (2016). Global Marketing Strategy: An Executive Digest. Springer.
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