Distribution - Complicated, but Most Crucial.

When we talk about the traditional 4 P's of Marketing i.e. Price, Place, Promotion and Product. The second "P", i.e. Place stands tall and remains as the most crucial in the marketing mix. As the time goes on, new concepts and moreover new "P's" get added to the broad world of marketing. But the importance of Distribution Channels which is also called as Marketing channels never get faded and new strategies are made frequently for getting the supremacy in Distribution Networks. In the age of Brands, majority of the brand wars are taking place for winning that most crucial "P", i.e. PLACE. It ranges from the low level fights of the employees of different firms for the shelf space with maximum visibility in a retail store to international tie-ups between conglomerates to distribute a product in particular markets. 

Speaking more about Distribution Channels, It can be broadly defined as the "Path through which goods and services move from the manufacturers to the final users for consumption". If we broadly classify the distribution channels, we will be able to find only two types,i.e. Direct and Indirect. Direct Distribution is without intermediaries and Indirect Distribution is with intermediaries, that is further classified as Level 1 - Only one intermediary ( Retailers in most cases); Level 2 - with two intermediaries (Retailers and wholesalers in most cases) and it goes on. The discussion about distribution channels will be incomplete if I don't mention about the different types of distribution. In major, there are three types of distribution. 1)Intensive Distribution :- In this type, the products will be filled and stocked in almost all the outlets available. Products will be made available in the smallest convenience stores to the biggest hyper markets. This kind of distribution strategy is mostly followed by impulse goods such as snacks,magazines etc...  

2)Selective Distribution :- In this type, manufacturers select a few and selected intermediaries to sell their products. This strategy is observed for more specialized goods. For example antique items, craft tools etc...

3)Exclusive Distribution :- In this strategy, manufacturers select only a very few intermediaries, that too their own franchises to sell the products. This strategy is most followed by expensive goods such as Automobiles etc... Selecting a distribution channel and type of distribution is one of the most crucial business decision of any firms. Even though there are a lot of theories to learn about distribution channels,it is obvious that in practical world, most of the firms go for their own uniquely designed distribution channels. Success lies in how effective and proper is their channels of distribution. They have to consider a lot of factors such as BRAND POSITIONING, TYPE OF PRODUCT, COST OF CHANNELS, TIME TO MARKET AND ON-SHELF COMPETITION. It is definitely not a good idea to sell the most costly watches of Rolex and Rado through the outlets of Walmart. If they have to position their products properly as a premium product, they will have to follow an exclusive distribution. At the same time, it will be ridiculous if cadbury decides to sell their chocolates only through their own outlets. For them, availability in market is the most crucial thing. Items like automobiles cannot be sold online, but apparels can be. Like this, Firms will have to decide their Distribution Channel. As the business world is moving in an admirable pace, most of the leading brands in the world is following a Hybrid marketing channel or Multichannel marketing. Hybrid marketing Channel means the use of more than one marketing channel to make the distribution network more effective. Apple Sells their iphones and ipads both through their own Apple Stores and and re-sellers. They even use the help of online retailing portals like E-bay and Flipkart and  retailing giants like Walmart and Tesco. All these different channels are used to make their distribution network very effective. But there is all possibility that Hybrid Distribution channels may result in channel conflicts as in the case of Apple products in which the re-sellers of iphones in USA confronted against the Apple stores for reducing their margins and making their business weak. So, even when using different channels of distribution, managing all these channels properly and maintaining good relations with the intermediaries is crucial for the success of any firm. 

While talking about Hybrid marketing channels, i would like to mention about PepsiCo. here, as they are one among the best brands in the world who designs and manages their distribution channels in the most effective way. In the matter of distribution operations, they outshines most of the other leading brands in the world. That is the sole reason why Hindustan Unilever joined their hands with Pepsi for distributing HUL's Lipton Ice Tea in India in 2003. Lipton Ice Tea which was not a market hit was transformed into a preferred product by the efficient distribution strategies of Pepsi. In USA, depending on the product involved Pepsico used different distribution methods such as DSD (Direct store delivery), BWD (Broker warehouse system), V&FS (Vending and Food Service system). For products which are very delicate like snacks (Pepsi's world famous Frito Lay products) they adopted the DSD system in which the employees of Pepsi actually go over to the retailers stores and arrange the products in their shelves. For their beverages like pepsi, tropicana etc... they adopted BWD in which they assigned third party distributors. V&FS are Pepsi's own sales personnel who is making their products available in schools, colleges, stadiums etc... Pepsi has one of the largest V&FS sales force in USA comprising of around 600 people. Efficiency in designing and maintaining the distribution channels has made Pepsi the top player in soft drinks industry. The Precision and innovation of Pepsi in designing their Distribution channels is actually a model for other firms. Even though I mentioned about Pepsi here, there are a lot of other brands who have excellent Distribution channels. All these underlines my previous statement that the "P" of "Place" stands tall in Marketing Mix.

Point Of Purchase Displays - Increasing Relevance

When it comes to what to buy, more decisions than ever before, 76% to be exact is made on the store. This in-store purchase decisions are often the major part of sales of many companies. Why Purchase decision is so unstable even though 100's of "shopping list" applications are available in the different smartphone application markets. If your answer is "The Emergence of Organized retailing", then it will not be specific. Here comes the relevance of POP's or Point of Purchase. The actual definition of point of purchase is that, "It is a place where sales are made or purchase decision is taken." So simple!! On a macro level it can be a Mall, Market or Even a city depended upon the product. On a micro level retailers consider it as a place in the store where the customer makes a purchase decision. The most frequent POP is the billing counter and the most often sold products over there are the impulse goods such as chocolates, magazines, novelties etc.. So there is a line of connection between the words Point Of Purchase, Impulse Goods and unplanned purchase decisions. On June of 2012, Point of Purchase Advertising International (POPAI) released the results of its recent research on the shopper decision process. To the surprise of many, the in-store decision rate according to POPAI is an all-time high of 76 percent. Now, I think i have made the title of this article more transparent. It is this increasing trend of unplanned purchase decisions that has increased the relevance of Point of Purchase displays. POP Displays can be anything such as small posters, cutouts, electric boards, shelf arrangements,display stand, dummy packs etc. which suddenly induces the customer to purchase the product.The relevance of POP displays can be well understood, if we observe the number of POP displays manufacturing and supplies companies emerging out in different parts of the world. In USA alone we can find around 50 different such firms.

In smaller retail outlets, POP displays are usually supplied by the manufacturer of the products, but located and maintained by the in-store sales persons or store managers.This is less common in larger Retail outlets such as the Walmart, Carrefour, Tesco etc.. who are usually called as the mighty retailers and is having high purchasing power. They control the supplier activities and prefer to use Displays designed in-house to ensure that store layouts and corporate themes are consistent. When I speak about POP Displays and the impulsive purchase decisions created by this, I am not underestimating the customers as someone who decides what to buy only through the Display ads inside a retail store. Customers of this  Era is filled with product knowledge more than the people of any times, but still, the availability of product in the stores, competitive pricing and POP displays do make a difference in the decision of the customer. Moreover most of the shopping lists made by the customers before visiting a store will be product based and not Brand based. So the decision regarding the brand selection is most often taken place inside the sore at least for the convenience goods. This is where the POP Displays is so important. Innovations should be regular in this field as outdated Displays and techniques can give negative results. POP Displays can fetch poor results also by Not considering the shoppers line of sight, Failure to adhere to retailers space limitations, Wrong location of the display, Over design etc.. Walmart is one retail firm which has brought revolution in Point of Purchase innovation by their latest addition of  Walmart TV, (A flat screen television which shows advertisements and other details, often attached to a shelf or rack.). This is actually creating an evolution to the POP displays to shoppers engaging instruments. Innovation is mandatory for survival in the market. While designing innovations for the different factors, Point of Purchase should be given prominent consideration as People actually buy things from there and after all the purchase decision of the customer is all that matters.