Page 403 - Foundations of Marketing

370 Part 5 | Distribution Decisions

Many producers, which previously had sold to wholesalers
and retailers, now feature online stores on their company
webpages that ship directly from producer to consumer.
This is an example of dual distribution because the products
are marketed to the same customers through different chan-
nels, one involving intermediaries and one direct. Take, for
example, the advertisement for Bell & Ross watches. Bell
& Ross is a French company that makes high-end military-
style watches that retail for thousands of dollars, as you can
see from the juxtaposition of watches and military images
in the advertisement. For most of its history, Bell & Ross
was a prestige brand available only at a very limited num-
ber of boutiques. Now the retailer uses dual distribution
by incorporating a direct distribution channel. Consumers
everywhere can shop for and purchase the timepieces at the
firm’s online store, which can be reached by the website or
the matrix barcode on this advertisement. Dual distribution
can cause dissatisfaction among wholesalers and retailers
when they must compete with the manufacturer that is sell-
ing its products online.
A strategic channel alliance exists when the products
of one organization are distributed through the marketing
channels of another. The products of the two fi rms are often
similar with respect to target markets or uses, but they are
Courtesy of Bell & Ross distributed through a marketing channel for soft drinks, or
not direct competitors. A brand of bottled water might be

a cereal producer in the United States might form a strategic
channel alliance with a European food processor to facilitate

for both the organization that owns the marketing channel
Using Multiple Marketing Channels international distribution. Such alliances can provide benefi ts
Bell & Ross uses dual distribution by selling its watches in and the company whose brand is being distributed through
boutiques and online at its company website. the channel.

Selecting Marketing Channels
Selecting appropriate marketing channels is important because once chosen, they are difficult
to change. Although the process varies across organizations, channel selection decisions are
usually affected by one or more of the following factors: customer characteristics, product
attributes, type of organization, competition, marketing environmental forces, and character-
istics of intermediaries (see Figure 13.4 ).

Customer Characteristics

Marketing managers must consider the characteristics of target market members in channel
selection. As we have already seen, the channels that are appropriate for consumers are differ-
ent from those for business customers. Because of variations in product use, product complex-
ity, consumption levels, and need for services, firms develop different marketing strategies for
each group. Business customers often prefer to deal directly with producers (or very knowl-
edgeable channel intermediaries such as industrial distributors), especially for highly techni-
cal or expensive products, such as mainframe computers, jet airplanes, or heavy machinery
that require strict specifications and technical assistance. Businesses also frequently buy in
strategic channel alliance An
agreement whereby the considerable quantities.
products of one organization Consumers, on the other hand, generally buy limited quantities of a product, purchase
are distributed through the from retailers, and often do not mind limited customer service. When customers are concen-
marketing channels of another trated in a small geographic area, a direct channel may be best, but when many customers

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