Distribution refers to the way products are disseminated from the producer to the consumer (Pride, & Ferrell, pp. 43). In reference to wholesalers, distribution is the way wholesalers avails the producer’s goods to different retailers and thereby relieving the producer the task of distributing his or her own goods.
Through wholesale warehousing, a wholesaler buys the goods from the producer or manufacturer in large quantities and avails the goods to the retailers and in turn ends up distributing the goods of the consumer to different retailers. A wholesaler who has many warehouses located in different locations will stock the producer’s goods in those warehouses and thereby end up in distributing the goods to different parts of the country.
On the other hand a retailer also aids in distribution of products through availing the producer’s goods to consumers. Retailers are strategically located in areas where consumers can easily access the goods they are selling and therefore the goods are distributed at ease.
While the wholesaler sells goods to retailers, industries and institutions among others, the retailer on the other hand sells them to the consumer through breaking the bulk. It is important to note that distribution plays a very important role in marketing as it enable consumers to get goods at convenient places thus acting as a link between the customers and the manufactures as well as other players in the supply chain (Pride, & Ferrell, pp. 99).
The distribution approach is however changing from what it used to be traditionally whereby products were produced and pushed down to a supply chain to a pull strategy through which the customer needs are identified, a product is designed to meet those needs and therefore the product just pulls itself down the supply chain to reach the target customer. This new strategy is often referred to as pull strategy and which in future will change the face of all distribution activities.
Market penetration is among the key concepts mainly used for new products in the market. It is a strategy that is employed to break through the market and gain the confidence of consumers for the new product(s).
Therefore market penetration may be used to refer to all those strategies that companies employ for their products to gain new customers and even gain the confidence of existing customers, for instance giving out free samples of the product for consumers to try it out and in turn win their loyalty to the product or renew the consumer loyalty to the product (Pride, & Ferrell, pp. 78).
Market penetration strategies are aimed at wooing the consumer to buy the product(s). There are many market penetration strategies among them free samples, pricing the products at lower prices than the competitors’ products, rigorous advertising of the product and inventing unique ways in which the product(s) can be distributed among other strategies.
The market penetration that products such as Coke cans Pringles tins, tide powder detergents and snickers chocolate have is on a global scale. The products are popular in the local, regional and even global markets. Market penetration starts with the immediate market and as the product gains popularity and acceptance in new markets, its level of penetration increases too (Pride, & Ferrell, pp. 52).
Furthermore, products are not only introduced into the new markets but also gain acceptance and popularity even in markets where there exists similar or substitute products.
For instance, taking a closer interest in Coca Cola marketing strategies, an international renowned company with excellent marketing strategies, one would ask the question of how Coca Cola products are consumed by over two hundred countries with different cultural backgrounds, languages and settings just to mention a few.
I would say that the answer lies in market penetration strategies of the company whereby the products are even advertised using different slogans and different languages and thus market penetration of the company’s products.
According to Pride, & Ferrell, (pp. 45), the market penetration gained by these particular products can be attributed to a number of marketing factors. However the major factors contributing to this are: product standardization whereby the manufacturers offer the same product to different markets while maintaining its features. The other factor is product positioning. This is often achieved when the manufacturer of a product creates a perception in the mind of the customers on how superior a given product is.
Once the customers have internalized the perception, the product is then positioned in their mind as being superior and thus gaining the loyalty of the customer. The other factor is intensive advertisement of the products in potentially new markets and even in the existing markets. Through the promotions, product awareness is created and market penetration for a particular product is enhanced globally (Pride, & Ferrell, pp. 83).
Selgros, Metro Ag and Costco Wholesale are retail stores that operate on global scale and currently enjoying high sales turnover. The establishments have adopted more or less similar marketing strategies in their operations, a factor that has contributed to their continued growth amidst competition from other equally well established retail stores globally. The common marketing strategies employed by these retail stores entail:
Use of ruffle tickets, this strategy promotes more purchases as customers buy more of a given product so as to increase their chances of winning draws on the ruffle tickets. This marketing strategy further promotes customer loyalty and gives products and brands that are important in achieving long term sales.
The other common marketing strategy employed is offering sales discounts on selected items. This strategy achieves increase in sales especially of those slow moving products and products whose sales period is low. The discounts also promote customer loyalty as it is considered as a treat to customers (Pride, & Ferrell, pp. 74).
The third common marketing strategy used is that of branding and packaging which not only gives more information about the product but also looks appealing. The branding on the product packages is a strong marketing tool which is less costly but with a wider coverage since the product may be used at different places in different times (Pride, & Ferrell, pp. 90).
The forth marketing strategy is use of catalogues which provide more information to customers for variety of products on sale. The catalogues contain the prices, alternative products and even pictures and can be carried away by customers for future reference thus providing a powerful marketing tool and strategy.
Finally, use of price differentiation is another marketing strategy employed by these firms. Under this strategy, the retail stores aim at minimizing their operation cost so as to sell their products at low prices as compared to competitors. This helps the firm to gain customer loyalty as customers always feel satisfied that they have got value for their money. This must however be accompanied by a high level customer service and good quality.
In today’s marketing environment where the customer has become sophisticated due to the ease with which information is available through the internet, firms must be proactive in their marketing strategies as well as their distribution activities. These are key areas as they directly impact on the sales and as such the profitability and growth of the firm (Pride, & Ferrell, pp. 63).
Retail supermarkets deal with mostly foodstuff and household goods. This type of supermarkets employ a marketing concept where goods that are related or close substitutes are displayed on the shelves and then the consumer picks the products from the shelves. Through retail supermarkets, marketers are able to assess the consumer buying patterns and therefore know the products that the consumer prefers.
Major components of category management in a retail supermarket environment includes, providing consumers with what they need best and providing consumers with exactly what they need. Products are arranged on the shelf to woe consumers into buying products.
Most of the products are from producers who are closely related and the goods can be close substitutes, which constitutes strategy component (Pride, & Ferrell, pp. 56). Another component of category management is grouping of the products which are similar. This allows the consumer to have a wide range of products form which to choose from.
Space planning is also a component used in category marketing in a retail supermarket to allow the display of good s in the supermarket store. Measuring the performance of the retail supermarkets on a regular basis and the capabilities of the retail supermarket to deal with the threats, opportunities and challenges in the environment through consumer buying habits is also another component of category management (Pride, & Ferrell, pp. 65).
When performance of the retail supermarket is continuously measured, the retail supermarket is able to evaluate its operations in light of the profit that the business is accruing from its operations. Business processes is also another component of category management whereby, in a retail supermarket, it is utilized through the way customers are served in a retail supermarket and the way the products are displayed to allow consumers to choose the goods they want on the shelve.
Works Cited
Pride, William, & Ferrell, Curtis. Marketing Concepts. Boston, South – West College Publishers, 2006. pp. 45 – 103