Introduction
The paper explores on the vast area of retail marketing distribution processes. The study is carried out for the firm “Proctor & Gamble”, to identify the possibilities of success and failure of its entry to the retail field with the current background as manufacturers and marketers. The channels of distribution with their probable flaws and advantages are discussed for the deduction of the recommendations for the case study.
Case Study
Proctor & Gamble is a manufacturing-cum-marketing company delivering consumer goods required for the basic needs of the customers. Recently, the firm has decided to enter the retail field of business. They have already bought about 70 retail shops across the world as an initial step. P&G is either experimenting or is sure for the retail field; an analysis on the situation is made here.
Retail Stores
Retail stores are the places from where the customers get the goods delivered. The retail outlets around the globe take different forms and setup. In the case of Proctor & Gamble, the retail outlets serve as the direct marketing method for their own goods without any intermediate personnel.
Brick n Mortar
The Brick n Mortar “refers to retail shops that are located in a building as opposed to an online shopping destination, door-to-door sales, kiosk or other similar site not housed within a structure.” (Waters, 2009, Definition, para.1). It incorporates the sale of various products in an outlet or shop, where the customers can come, select and pay to take it home.
Click n Pick
These are retail shops where the goods are sold at a rate which is dependent on the number of goods clicked for picking up. The cost of individual goods may vary according to total goods selected for purchasing.
Marketing channels
Marketing channels are “the set of interdependent organizations involved in the process of making a product or service available to customers.” (Marketing channels, n.d., para.1). The products manufactured by any firm are not often marketed and distributed by the producers themselves. These works are accomplished by different companies to whom the manufacturers pay for it. In case P&G takes an action in the field of retail as well, a reduction in the expenditure contributing to increase in profit can be attained. The amount given to such marketing channels can be saved and used for further benefits of the firm.
Channels of distribution integrated to marketing strategy
The channels of distribution in the marketing can be viewed as the entire activities performed as well as the organizations involved in it. The factors in the marketing process are integral part of the channels of distribution. “Activities involved in the channel are wide and varied though the basic activities revolve around these general tasks:
- Ordering
- Handling and shipping
- Storage
- Display
- Promotion
- Selling
- Information feedback.” (Internet marketing secrets, 2009, What are the channels of distribution, para.2).
The channels of distribution perform the tasks of taking and keeping the orders, transportation of goods, storing in the proper places, exhibiting, promoting the goods, sales and noting down the reactions of customers for the future betterments. The retail shop which is well advertised performs all these tasks at a single stretch avoiding the requirement of any other organization.
Problems in the distribution process
“The problems of distribution are those of the organizational structuring of business activities within the distribution system.” (Papavassiliou, 1991, p.127). The managing of the distribution processes are sought out to as the identification of various problems faced in the execution of the various channels of distribution. The setting up of the channels of distribution considering every aspects of marketing like public, official, and financial factors is one major problem faced in the distribution process. The relationship and deals of the firm with various external systems also contribute to the difficulties in process of distribution.
Effects of Target Market
The target of the marketed product affects the business of retailing to a very great extent. If the goods are targeted at smaller groups of customers, it would be better to make the products reach the consumers through retail outlets. Also in the case of areas where the customers are very high in number, the retail outlets will do well far better than any other methods. For the goods with customer spread throughout the world, retailing requires the establishment of more shops at various places. P&G can seek out the benefits and flaws regarding the target markets by surveying on the demand and distribution of goods and customers around.
Organization’s channels of distribution
The organization’s channels of distribution can be molded out with respect to the competitive advantages and organization’s market strategy because the activities of marketing of goods and services always depend on the action plan executed by the competitors in the field and the strategies carried out by the firm.
Competitive advantages
The advantages for the firm in the competitive strategy of marketing can be increased by retailing. The management of the firm gets chances to interfere with the customers’ views and feedbacks. Also it helps them to closely get exposed to various threats from the part of competitors, thereby helping to take effective measures against those threats and face the challenges in sales. Proctor & Gamble can take this as a merit for launching its plan of retail shops.
Organization’s marketing strategy
The marketing strategy developed by the organization can be made much effective in a case it gets exposed to various channels of distribution. P&G would be able to analyze its position in planning process compared to the market to which it is exposed to. This can be easily achieved while taking up retailing as well along with manufacturing and marketing.
Recommendations
The study as a whole has given an overall idea on the retailing of goods in the market. The advantages and defects in the proposal of launching retail outlets are identified. It can be recommended that it would be a good step by establishing own retail shops by Proctor & Gamble. Those outlets will turn out by themselves to be the effective advertisements and display of the products of Proctor & Gamble. Also the cost due to intermediates in marketing can be eliminated along with the merits of real life feedback from the customers. The initial launch can be made to areas where the customers are dense and for the goods with lower number of customers.
Conclusion
The case of launching retail shops by Proctor & Gamble can be taken as an advantageous step yielding profit. But the plan should be proper so that the launch never turns out to be a flop. Thus, it becomes a welcome step heading towards lower expense, increased profit and expanded quality of products resulting in the contentment of the manufacturers as well as the end users.
Reference
Internet marketing secrets: What are the channels of distribution?. (2009). Know This.com. Web.
Marketing channels. (n.d.). Marketing MiMi.hu. 2009. Web.
Papavassiliou, N. (1991). Developing and implementing distribution system strategies and process strategies: an appraisal of the determinant factors in Greece. Web.
Waters, S. (2009). Brick and mortar: Definition. ASbout.com: Retailing. Web.