Dual distribution

From CEOpedia | Management online

Dual distribution involves simultaneous distributing services or products through two or more marketing channels. Dual distribution is forward vertical integration by producers and wholesalers who too utilize autonomous reseller clients. It could be a merchandising system, a combination of two unmistakable designs of distribution[1].

Marketing distribution

Distribution (place) is one of the four elements of the marketing mix. The objective of distribution and supply chain administration is fundamental to induce the item to the correct place, at the correct time, within the right amounts, at the most reduced conceivable taken a cost[2]. Supply chain choices include a long line of activities-from the sourcing of crude materials, through the generation of wrapped up items, to conveyance to final customers[3].

Distribution channels

Each distribution channel will have another structure for each company utilizing the same distribution channel[4]. Although in spite of the fact that there may be a few companies included in showcasing comparable items on the same channel, they will not, as a rule, utilize all of the same wholesalers and retailers within the channel[5]. Various item bunches, service needs, company approaches, and the like will require distinctive channel structure [6].

Marketing channel structure

The fundamental distribution channel structure comprises three components[7]:

  • The item source or producer is the starting.
  • Next, there are the mediators within the channel, which are chosen from a list of wholesalers, brokers, operators, retailers, or branches.
  • At long last, there are the clients or buyersof the item or products.

The indirect members contain the remaining bunch of channel individuals. The distribution channel structure may comprise of two or more levels. The number of levels required is decided by the need for channel mediators to perform all the assignments required to form the channel work. In general, the more members utilized within the channel structure, the more cost[8].

Examples of Dual distribution

  1. Retail stores/Online Shopping: Many companies are now utilizing dual distribution by selling their products both in retail stores and online. This allows them to reach a wider customer base and provide more convenient shopping experiences for their customers.
  2. Online Streaming/Cable TV: Many TV networks are now offering their shows and movies both on cable and online streaming services. This allows them to reach a wider audience and offer more choice for their viewers.
  3. Direct Sales/Wholesale: Many businesses are now using dual distribution by selling their products both directly to customers and through wholesalers. This allows them to maximize their profits and reach more customers.

Advantages of Dual distribution

Dual distribution has many advantages, including:

  • Increased reach: By using two distribution channels, a business can reach more potential customers, leading to increased sales.
  • Increased efficiency: By utilizing both channels, a business can optimize its resources, leading to faster delivery and higher customer satisfaction.
  • Increased visibility: Having two distribution channels can help create brand awareness and increase visibility in the marketplace.
  • Reduced costs: By spreading out the cost of distribution between two channels, businesses can lower their overall cost.
  • Improved customer service: Dual distribution can help businesses provide better customer service by offering multiple options for delivery and payment.

Limitations of Dual distribution

Dual distribution can be a beneficial strategy for companies that have multiple product offerings, but there are several limitations to consider. These include:

  • Cost: Dual distribution requires additional resources for sales and marketing, which can be costly. Moreover, there may be additional costs associated with managing two different channels, such as training and support.
  • Complexity: With dual distribution, there must be a clear understanding of who is responsible for what in each channel, as well as how the channels are to be managed. This can lead to increased complexity in the distribution system and the need for a greater degree of coordination between the channels.
  • Channel Conflict: When two different channels are used to distribute the same product, there is the potential for channel conflict. This can occur when one channel attempts to undercut the other in order to gain market share.
  • Confusion: When two channels are used to distribute the same product, there is the potential for customer confusion. This can lead to customers not understanding which channel offers the best deal or which channel the product should be purchased from.

Other approaches related to Dual distribution

Dual distribution is not the only approach to distributing services or products through two or more marketing channels. Other approaches include:

  • Multi-level marketing, which involves recruiting multiple salespersons to market products or services, with each salesperson receiving a commission on their sales.
  • Multi-channel marketing, which involves utilizing multiple digital or physical channels to reach customers and prospects.
  • Cross-channel marketing, which involves using multiple channels to coordinate marketing activities and create a unified customer experience.
  • Multi-brand marketing, which involves creating multiple distinct brands that can be marketed through different channels.

In conclusion, dual distribution is just one of the many approaches to distributing services or products through multiple channels, and each approach has its own advantages and disadvantages. Understanding these approaches can help businesses determine the best way to reach their target audience.


Dual distribution — recommended articles
Channel width — Indirect marketing channel — Distribution policy — Reintermediation — Central procurement — Indirect channel of distribution — Direct exporting — Direct distribution — Multi-channel distribution

References

Footnotes

  1. ↑ United States Congress(red)(1964)
  2. ↑ Ferrell O. C.(red)(2007)
  3. ↑ Ferrell O. C.(red)(2007)
  4. ↑ McCalley R.(red)(1992)
  5. ↑ McCalley R.(red)(1992)
  6. ↑ McCalley R.(red)(1992)
  7. ↑ Ferrell O. C.(red)(2007)
  8. ↑ Ferrell O. C.(red)(2007)

Author: Monika Kromka

Retrieved from "https://ceopedia.org/index.php?title=Dual_distribution&oldid=90294"