Manufacturers should establish clear goals for their distribution channels in order to determine the most appropriate configuration. Some potential goals that a manufacturer may have for their channel include:
- Maximizing coverage: A manufacturer may aim to have their products available in as many locations as possible in order to reach the maximum number of potential customers (Akbar & Irohara, 2018). This would require a wide distribution network, including both retail and online channels.
- Targeting specific segments: A manufacturer may want to target specific segments of the market, such as high-end consumers or a specific geographic region. This would require a more focused distribution strategy, with channels selected specifically to reach these target segments.
- Controlling distribution costs: A manufacturer may aim to minimize distribution costs, for example by using fewer intermediaries or by distributing products directly to retailers.
- Building a strong brand: A manufacturer may want to build a strong brand by associating their products with specific retailers or by controlling the way their products are presented in retail outlets.
Once a manufacturer has established their goals, they can then determine the most appropriate configuration for their distribution channel. For example, if a manufacturer wants to maximize coverage, they may choose a wide distribution network with both retail and online channels (Akbar & Irohara, 2018). If they want to target specific segments, they may choose a more focused distribution strategy with specific channels selected to reach these target segments. It is also worth mentioning that manufacturers should consider the type of product and the target market. They should also review the competition and their distribution strategy. Finally, they should also evaluate the channel performance and make adjustments as needed.
References
Akbar, M., & Irohara, T. (2018). Scheduling for sustainable manufacturing: A review. Journal of Cleaner Production, 205, 866-883. Web.