Strategic Marketing Plan For A Company 's Distribution Channels

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1. The Costs of operating a company’s distribution channels and the ways to manage such costs.
Decisions relating to the channels of distribution for a product or service are part of the strategic marketing plan. In that plan, the target market will have been specified along with target levels of market share, market coverage, customer service and so on. The channels of distribution used by an organisation must be capable of assisting in reaching these targets. Moreover, the establishment of a distribution system can take a long time, perhaps several years, and so decisions about the channels of distribution cannot be taken lightly, and have to be taken with a view to the longer term since it is not usually that easy to switch between channels.
Strategic planning: Distribution channels must be compatible with the strategic marketing plan. If, for instance, a skimming strategy has been adopted or the product requires technical sales support, then mass marketing is probably inappropriate. Alternatively, if large volume sales are required in order to achieve particular profit targets, then selective distribution would be inappropriate.
As new products are introduced, existing channels have to be reassessed since they may not be the right channels for the new product. In some cases, a company will decide not to launch a new product because it does not fit in with existing distribution channels and existing strategy. A few years ago Ciba, the Swiss chemicals company, was looking

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