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Selling is not complete until the product (or service) reaches the final consumer. There are a series of actions that have to be taken before a product reaches the final consumer — and such actions can be designed using the marketing mix distribution strategy.
Nowadays, there are multiple ways of getting your product to the final consumer. You could opt for the direct method by selling on the online store, or distribution channels like resellers, retailers, and wholesalers.
In this guide, you’ll discover what a marketing mix distribution strategy is, and how to come up with the best distribution strategy for your business.
First…
Definition: A marketing mix distribution strategy shows how a product (or service) gets to the final consumer. It’s also referred to as a place strategy — and it comprises the marketing four Ps. These Ps are product, price, place, and promotion.
With the right marketing mix distribution strategy, you can ascertain that your products are delivered at the right time, to the right place, and in the most convenient way. This will, in turn, boost your customer satisfaction and overall sales.
Here are major reasons why a marketing mix distribution strategy is important.
If your target audience shops at luxury shops, offering discounts won’t cut it. You need to strategically showcase your products so that your target audience will see them when they go shopping.
By constantly putting your brand offering in front of your buying audience, you’ll most likely record sales that come from impulse buying. You’ll also increase your likelihood of having repeat business.
Making your product easily accessible contributes to a seamless customer experience. When getting your products is somewhat difficult, it may lead to customer frustration, and increased chances of losing sales.
A robust distribution system reduces delivery-related costs. And that involves opting for the right storage methods, and efficient transportation networks.
Places where your products are displayed could influence how customers perceive the products. For instance, the sale of luxury watches at regular stores doesn’t align with the premium image the product is known for.
The two major types of marketing mix distribution strategy are direct and indirect. Here’s a quick breakdown of how they work.
This strategy involves selling directly to the final consumer, and it eliminates the need for a middleman. Direct distribution can be carried out using your physical (or online) store. Trade shows and conventions are also great avenues for direct distribution.
In direct distribution, you’ll have significant control over your branding, pricing, and overall customer experience. It also allows you to directly seek customer feedback. By eliminating middlemen, you’ll most likely generate higher profit from your product sales.
On the flip side, a direct distribution strategy requires a massive upfront investment, and you may have limited reach (during your early years).
It involves the use of intermediaries like retailers, wholesalers, and distributors. These intermediaries make up the various channels found in the indirect distribution strategy.
Since an indirect distribution strategy uses multiple channels, you’ll most likely reach a broader market. And the distribution workload will be spread across the various channels. That is, intermediaries will handle marketing tasks and logistics.
On the flip side, you’ll have less control over your product pricing, and customer experience. Your profit margin will most likely be low, and you may not have much access to customer data.
Here are simple steps to help you choose the right marketing mix distribution strategy for your business.
You need to have a good grasp of the demographics of your target market. The demographics could be their location, income, age, or lifestyle. Their buying behavior is also something to take note of. Where and how do they buy products? Finally, you have to have an understanding of their pain points and challenges.
What products are you selling? Are you looking to sell luxury or regular products? Furthermore, do you have much room for markups when working with intermediaries?
Do you have the manpower to handle multiple distribution channels, or do you prefer setting up direct channels? Do you have the experience and technical know-how to manage your marketing logistics? Answers to these will help in the effective management of your resources.
What distribution channels are your competitors using, and how do their product prices compare to yours? Answers to these give you a clue to their distribution and pricing strategy.
What are your business goals? Are you looking to grow your brand reach, or your primary objective is to sell more products? Furthermore, what things will you put in place to help you generate more profit from your product sales?
To measure the success of your distribution strategy, you need to keep a close eye on your key metrics. For website engagement and website traffic, you need to monitor metrics like unique visitors, time on site, website traffic, bounce rate, and the number of pages visited.
If you’re looking to measure your conversion and sales rates, then you have to keep a close eye on metrics like sales figures, conversion rate, and the average order value.
Having a strong social media presence is of the essence — after all, your customers are constantly engaging in these social media platforms. To get the most out of your social media activity, you need to monitor your social media analytics — and that involves keeping a close eye on your reach, click-through rate (CTR), and engagement.
Furthermore, you can opt for email marketing — and that involves measuring metrics like clickthrough rate (CTR), conversion rate, and open rate. All these metrics give you a clue about how your email marketing campaign is performing.
Aside from metrics, you could opt to ask for feedback from customers. To gather feedback, you can consider getting customer reviews through review platforms or surveys. All these help you to figure out what’s going on in the minds of your customers, and how your products are perceived in the marketplace.
Brand mentions also come in handy at this point. Get a team that can track your brand mentions across multiple social media platforms and online forums.
Finally, you have to calculate your return on investment (ROI). Your ROI tells you everything you need to know about your marketing mix distribution strategy. To effectively calculate your ROI, you need to take a close look at your sales generated, marketing spend, and customer acquisition costs.
It’s important to note the marketing channel that generates the most sales for your business, and also split test your marketing campaigns. This helps you figure out what’s working (and double your efforts in these areas) while withdrawing your resources from strategies that are not working.
The four major elements of a marketing mix strategy are:
A good example of a distribution strategy is how the Red Bull company sends its products down to the final consumer. After product production, the company uses distributors and retailers (like supermarkets) to get their products into the hands of their final consumers.
Direct distribution strategy involves the sale of products from the manufacturer (or producer) directly to the final consumer. It eliminates the use of intermediaries (like wholesalers).
Distribution strategy is the process producers (or manufacturers) place their products in a marketing distribution channel. These distribution channels could be direct sales, retail, or wholesale.
A robust marketing plan should have a detailed marketing mix distribution strategy. A good marketing mix should have the four Ps — product, price, placement, and promotion.
The right distribution strategy helps in ascertaining that the product is made available at the right time, at the right place, and in the most convenient way. This will, in turn, boost your customer satisfaction and overall product sales.
A marketing mix distribution strategy also factors in the distribution channels — and these include direct and indirect distribution. In direct distribution, producers sell directly to the final consumers, while intermediaries are used during indirect distribution.
Your choice of a distribution channel should be dependent on your budget, target audience, and the kind of product you’re selling.
Now you know what a marketing mix distribution strategy is, what distribution channels will you use to sell your products, and why?
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