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Identify the Target Market Taobao target market is the young generation. The young generation are from 20 to 30 years old with good educational levels. This is because they will be able to afford the items being sold at Taobao. Recently, they also added people that are older in their target market base. Adults that are working are able to pay for the products being sold on Taobao as well. The major customer of Taobao are those living in the more developed cities. They also target more locally based and abroad. They sell more items by having more target market. Channel Distribution Density The Channel Distribution Density that Taobao uses includes both intensive and selective distribution. Both types of distributions are used depending on the products and the shop owners of Taobao. In intensive distribution, the product is sold to many retailers and wholesalers. This type of distribution is used for …show more content…
Customers are able to view and test the products out at the retail outlet with convenience. Retailers can also promote the product to the customers by making them aware of the products availability and tell them the information of the product before encouraging the sale. This is an excellent intermediary for distributing the products around the world. Many retails prefer getting their products directly from the producers to save the trouble of going through wholesalers as it will be more convenient. Producer to Wholesaler to Retailer to Customer Products are sold directly to wholesalers. This is used when large amount of product is bought from the producer. Wholesalers then break the bulk into smaller quantities before selling it to retailers. However, larger retailers are able to buy directly from the producers and cut out the wholesalers. This means that large retails can sell their products cheaper to the customers as compared to those retailers that buys from the wholesalers. Sell on
Over the years role of supply chain has been altered. The distribution has switched from shipping from one focal point, now technology has shortened the process that will to ship directly from the manufacture to the customer that will tie in to the distribution channels. Though distribution is costly, a person would think all the risk will be eliminated. Contrarily to what people may think, distribution have many risk it must account. When the product is unloaded onto the truck, it’s the trucker sole responsibility to ensure the customer receive their product. Distribution initially start at beginning when it is
...urselfers. The distribution strategy identifies the major channels through which the product will delivered and pushed through to the consumers.
2. Mr. Babasab Patil their paper title “Study to assess the effectiveness of distribution channel of Coca cola co. at Belgaum city”: Distribution Channel plays a very important role especially with respect to the soft drink industry because if the product is not available on time the consumer will switch on to other brands and the company will loosen its market share and hence an effective distribution channel is the need of this industry.
An outlet store is a retail channel which allows the manufacturers to sell stocks directly to consumers (Wikipedia,2013). Although people may hold the misperception that products in outlet stores do not have the same quality as good as those sold in the department store, a research conducted by Fowler and Clodfelter (2001) indicates that besides the prices, there are hardly any differences between products sold in the two channels.
In distribution channels, the authors introduce distribution channel strategy which consists of Channel Structure, Management and Performance. Channel structure describes how firms can convey products to end-users. There are two types which are direct and indirect channels. Direct channel means that firms which are manufacturers sell their products directly to customers (e.g., sale on own company stores or companies’ websites) without any intermediaries. However, indirect channel is the way that firms sell through intermediaries in order to deliver products into markets. In addition, the authors suggest that firms can apply both direct and indirect channels which are called “Hybrid or Multi channel” (e.g., franchises, cooperatives) in order to increase the success of product delivery to the markets.
For example: a product producer will use physical retailer store, online retailer store to show number of product for consumer.
Thus, customers can get and receive information from each other instead of communicating to the corporations or the companies and as result they can easily spread information about company products as well as information about new arrivals
Strong distribution network should be made in order to ensure accessibility of the product. Various factors should also be kept in mind while designing a distribution strategy which includes the shelf life of the product, its characteristics and location of the store where the product is available. Strong relations with retailer are to be made because as discussed earlier retailer is the one who influences the buying decisions the most.
Wholesalers acts as a lesion between manufacturers of commodities and other industries that are interesting in selling the same products. Along this distribution chain wholesalers usually purchase goods in large quantities and in turn sells them to retailers who ultimately supplies goods and services to consumers. Due to the available space at wholesale locations they are able to store products for distribution to retailers which reduces retailers storage costs. Wholesalers are able to store goods in large quantities which allow retailers to purchase in small quantities. Due to this option retailers are able to only purchase what is needed at that given point (Kotler & Keller, 2012). Additionally, because wholesalers are able to purchase goods
There are many reasons for choosing to go into a store to purchase items needed. For instance, having someone assist you in finding what you need, or just answer questions about the product. It is also a way to get off the couch, away from the television, or off the computer. Another feature is you can see and examine what you are going to purchase. This helps in the decision making for most people. You know the minute the salesperson rings you up, the product is yours to take home and use right aw...
wholesalers and retail the items to end buyers. Subsequently the retailers are relied on upon free
In this type of distribution channel the manufacturer can directly sell their products to the end customer. There is no other intermediaries in this distribution
MAIN ISSUE LITERATUR REVIEW Channel Distribution Channel distribution is sets of interdependent organization involved in the process of marketing product or service available for use or consumption (Kotler, 2006). Channel’s advantages Instead of did everything in a house by producer themselves, Producer gain several advantages if they would like to use intermediaries. Below are the advantages (Kotler, 2006): Many producers lack the financial resources to carry out direct marketing. Producers who do establish their own channels can often earn a greater return by increasing investment in their main business. In some cases, direct marketing simply is not feasible. *Distribution Channel-Strategy* (www.tutor2u.net) The factors that influence the choice of distribution channel by a business: The willingness of channel intermediaries to market product is also a factor. Retailers in particular invest heavily in properties, shop fitting etc. They may decide not to support a particular product if it requires too much investment (e.g. training, display equipment, warehousing). Another important factor is intermediary cost. Intermediaries typically charge a "mark-up" or "commission" for participating in the channel. This might be deemed unacceptably high for the ultimate producer business. A key question is whether the producer have the resources to perform the functions of the channel? For example a producer may not have the resources to recruit, train and equip a sales team. If so, the only option may be to use agents and/or other distributors. Producers may also feel that they do not possess the customer-based skills to distribute their products. Many channel intermediaries focus heavily on the customer interface as a way of creating competitive advantage and cementing the relationship with their supplying producers.
Basically, manufactures try to find solution for distribution of their brand within many categories of consumer products. There is a solution that have been found which known as the distribution intensity. Distribution intensity defined as marketer choose the level of product availability and factors such as the size of target market, production capacity, pricing, services, and promotion if applicable (“ Distribution Intensity”, 2004). Coughlan et al. (2001) mentioned that customers could buy a
products they want. The goal is to not only provide consumers with what they know they