Recognizing that numerous routes to your target customers exist, the entrepreneur must consider the following when choosing a distribution channel strategy for access to products/services:
- Effectiveness–How well does the channel strategy meet customers’ needs/requirements?
- Cost-efficiency/profitability–Can the venture gain access to customers in a costefficient way?
- Adaptability–Can the channel handle new products/services and incorporate emergent (new, developing) channel forms?
Select a product or service and respond to the questions above by describing how the channel(s) deliver value for the target market.
This post was part of TyroCity discussion forum
Question asked by devnand_giri
Top comments (1)
There exists a number of ways to reach to the target customer however, not all the ways are chosen by the entrepreneur to deliver products and services to the customer. The accelerated change in technology, increased marketplace demands, aggressive global competition and shift in population demographics has affected the distribution channels and ways to reach the market. So, every time the distribution processes disrupt itself to find a new and effective way to reach the customer. However, an entrepreneur must consider the following 3 things while choosing a channel strategy for access of product or services. So, I have chosen Gillette’s razors for studying the distributing channel.
Firstly, Effectiveness. Effectiveness determines how efficiently the channel strategy meets the needs and requirements of customers. Market orientation has a direct relationship with market effectiveness and a good service quality. Gillette is mostly promoted as a high-quality product and is almost available at major shopping centers in Nepal. On the other hand, its less-value products can be found in small retail shops and in the urban areas of Nepal. On the other hand, the company promotes direct supply to retailers removing wholesalers so that they can replenish the goods that is according to the people’s actual needs or requirement.
Secondly, Cost efficiency or profitability. This factors determines how a venture can gain customers in a cost effective way. Gillette Company was merged with P&G in 2005, giving it access to one of the biggest conglomerate’s network access to 140 countries while they have also opened the factories at hubs with more demand, like China and India. In India, Its network is quoted as very organized and with a franchise distributor in every city and with employees managing the system while they also have recruited DHL Courier as service provider.
Lastly, adaptability. This dimension talks about how the company can incorporate new channels of distribution. Gillette isn’t far beyond other competiors in e-commerce generation. The company has started selling products online from its website meanwhile, they also have a "shaving club” which is a new emerging concepts. The subscribed customers get a monthly supply of shaving materials delivered through their doorsteps by the subscription to this shaving club.