If your customers don’t e to you； then you have the following options
in ge。。ing your product or service to them：
。 Retail stores： This general name covers the great range of outlets from
the corner shop to Harrods。 Some offer speciality goods such as hi…fi
equipment； where the customer expects professional help from the staff。
Others； such as Marks & Spencer and Tesco； are mostly self…service；
with customers making up their own mind on choice of product。
。 Wholesalers and distributors： The pa。。ern of wholesale distribution
has changed out of all recognition over the past two decades。 It is still
an extremely important channel where physical distribution； stock
holding； finance and breaking bulk are still profitable functions。
。 Cash and carry： This slightly confusing route has replaced the traditional
wholesaler as a source of supply for smaller retailers。 In return for
your paying cash and picking up the goods yourself； the ‘wholesaler’
shares part of his or her profit margin with you。 The a。。raction for the
wholesaler is improved cash flow and for the retailer a bigger margin
and a wide product range。 Hypermarkets and discount stores also fit
somewhere between the manufacturer and the marketplace。
。 Mail order： This specialized technique provides a direct channel
to the customer； and is an increasingly popular route for new small
businesses。
。 Internet： Revenue generation via the internet is big business and ge。。ing
bigger。 For some sectors； such as advertising； books； music and video；
it has bee the dominant route to market。 There is no longer any
serious argument about whether ‘bricks’ or ‘clicks’ is the way forward；
or if service businesses work be。。er on the web than physical products。
Almost every sector has a major part to play and it is increasingly
unlikely that any serious ‘bricks’ business will not either have or being
building an internet trading platform too。 Dixon’s； a major electrical
retailer； has shi。。ed emphasis from the high street to the web and Tesco
has built a ￡ billion…plus home delivery business on the back of its store
structure。 Amazon； the sector’s pioneer； now has in effect the first online
department store； with a neat sideline in selling on second…hand items
once the customer has finished with the product。
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。 Door…to…door selling： Traditionally used by vacuum cleaner distributors
and encyclopaedia panies； this is now used by insurance panies；
cavity…wall insulation firms； double…glazing firms and others。
Many use hard…sell techniques； giving door…to…door selling a bad name。
However； panies such as Avon Cosmetics have managed to sell
successfully door…to…door without a。。racting the stigma of unethical
selling practices。
。 Party…plan selling： This is a variation on door…to…door selling that is on
the increase； with new party…plan ideas arriving from the United States。
Agents enrolled by the pany invite their friends to a get…together
where the products are demonstrated and orders are invited。 The agent
gets a mission。 Party plan has worked very well for Avon and other
firms that sell this way。
Selecting distribution channels
These are the factors you should consider when choosing channels of distribution
for your particular business：
1。 Does it meet your customers’ needs？ You have to find out how your
customers expect their product or service to be delivered to them and
why they need that particular route。
2。 Will the product itself survive？ Fresh vegetables； for example； need
to be moved quickly from where they are grown to where they are
consumed。
3。 Is it patible with your image？ If you are selling a luxury product；
then door…to…door selling may spoil the impression you are trying to
create in the rest of your marketing effort。
4。 How do your petitors distribute？ If they have been around for a
while and are obviously successful； it is well worth looking at how your
petitors distribute and using that knowledge to your advantage。
5。 Will the channel be cost…effective？ A small manufacturer may not find it
cost… effective to sell to retailers over a certain distance because the direct
‘drop’ size – that is； the load per order – is too small to be worthwhile。
6。 Will the mark…up be enough？ If your product cannot bear at least a
100％ mark…up； then it is unlikely that you will be able to sell it through
department stores。 Your distribution channel has to be able to make a
profit from selling your product too。
7。 Push–pull： Moving a product through a distribution channel calls for
two sorts of selling activity。 ‘Push’ is the name given to selling your
product in； for example； a shop。 ‘Pull’ is the effort that you carry out on
the shop’s behalf to help it to sell your product out of that shop。 That pull
may be caused by your national advertising； a merchandising activity
or the uniqueness of your product。 You need to know how much push
and pull are needed for the channel you are considering。 If you are not
108 The Thirty…Day MBA
geared up to help retailers to sell your product； and they need that help；
then this could be a poor channel。
8。 Physical distribution： The way in which you have to move your product
to your end customer is also an important factor to weigh up when
choosing a channel。 As well as such factors as the cost of carriage； you
will also have to decide about packaging materials； warehousing and
storage。 As a rough rule of thumb； the more stages in the distribution
channel； the more robust and expensive your packaging will have to
be。
9。 Cash flow。 Not all channels of distribution se。。le their bills promptly。
Mail…order customers； for example； will pay in advance； but retailers can
take up to 90 days or more。 You need to take account of this se。。lement
period in your cash…flow forecast。
Logistics
The goal of a marketing logistics system is to manage the whole process of
ge。。ing products to customers in an efficient and cost…effective manner to
meet marketing goals； and to get faulty or unwanted products back。 This
interfaces with a host of related areas of business； including physical transportation；
warehousing； relationships with suppliers； and inventory and
stock management。 Some important considerations in logistics include：
。 Just in time （JIT） aims to reduce the need for warehousing through
accurate sales forecasting。 All parties in the distribution channel carry
minimum stock and share information on demand levels。
。 Vendor managed inventory （VMI） and continuous inventory replenishment
systems （CIRS） require customers to share real…time data on
sales demand and inventory levels with suppliers。
Both supplier and customers； while benefiting from cooperation； have
mutually conflicting goals in that they want to shi。。 costs onto the other
party。 Their capacity for doing so depends on their relative strengths。 For
example； giant retailers such as Tesco and Marks & Spencer have been
very successful in ge。。ing their suppliers to carry a major part of the cost of
stockholding。
SELLING
Marketing is the thinking process behind selling； in other words； finding
the right people to buy your product or service and making them aware
that you are able to meet their needs at a petitive price。 But just because
customers know you are in the market is not in itself sufficient to make
them buy from you。 Even if you have a superior product at a petitive
price they can escape your net。
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Ge。。ing customers to sign on the do。。ed line almost invariably involves
selling。 This is a process that business people have to use in many situations
other than in persuading customers to buy。 MBAs have to ‘sell’ bank
managers the idea that lending their business money is worthwhile； that
shareholders should invest； that employees by working for them are making
a good career move or that their boss should back one of their proposals。
Though essential； selling on its own is an inefficient method of ge。。ing
potential customers to the point of buying。 Understanding the ‘ascending
ladder of influence’； as marketers call it； puts t