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Tyler Hill 08/12/10 American Intercontinental University Abstract Now that my product, M&M candy pieces has been developed, it needs to be determined how it will become available to the end user. There are a few things that need to be determined before this can happen. These include an overview of distribution channels that also include channel levels and channel organizations. Another thing that needs to be considered is analyzing my target market needs- meaning I need to know my target market and what they want form a channel of distribution.
Next will to discuss channel members will be used and why. The last two things to be discussed are how many channel members will be used and why. The last item to be discussed is a recommended channel organization and why it will be used. So overall I will explain how the product will be distributed, who it will be appropriately distributed to, and why will it be distributed to that channel organization. When discussing how the product, M&Ms will be distributed in a marketing channel we need to first know what a marketing channel or more commonly known as a distribution channel.
A marketing channel is defined as: A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user (Armstrong&Kotler, 2009). So basically businesses or consumers use what is called as an intermediaries or a “middleman” if you will to bring their products to the market. It makes it easier if it is done this way vs. an individual or business taking all the time, resources and money to try and figure it out how to do it themselves.
The companies channel decision can affect all the other marketing decisions, such as price, place, and what product will be distributed in high retail stores or supermarkets or even via the internet. The next two items to be discussed are channel levels and direct marketing channel and indirect marketing channel. The term channel level is defined as: A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer (Armstrong&Kotler, 2009).
Basically this allows companies to design their distribution channels or marketing channels to make products and/or services available in many different ways to the consumer. There are two different channels and the number of intermediaries determines the length of each channel. The first channel called direct marketing channel is a marketing channel that has no intermediary levels. This means that the company has no “middleman” and sells directly to the consumer. This could include door to door sells such as AVON and Mary Kay as well as insurance companies that sell directly over the phone and internet.
The next one is indirect marketing channel. This is where all remaining channels fall into. It is a channel that contains one or more intermediary levels (Armstrong&Kotler, 2009). This includes supermarkets, grocery stores and retail stores. Marketing channels consist of firms that have partnered for their common good. Each channel member depends on one another, this is called channel behavior. There are different sections involved. The first one is horizontal conflict. This occurs among firms at the same level of the channel (Armstrong&Kotler, 2009).
An example of this is Holiday Inn franchisees complaining that Holiday Inn operators offer overly high prices or poor service thus hurting the Holiday Inn image. The next one is vertical conflict which means, conflicts between different levels of the same channel (Armstrong&Kotler, 2009). This means that when companies that has exclusive independent channels that they distribute to and then they distribute to more mass sized retailers, thus causing conflict between the two. Next will be conventional distribution channel.
This is when a channel consists of one or more independent producers, wholesalers, and retailers. Each is a separate business seeking to maximize its own profits, perhaps even at the expense of the system at a whole. Lastly will be multichannel distribution system. This is a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments. A prime example of this is when John Deere company distributes to many different retailers such as John Deere retailers, Lowes Home
Improvement and even online. Next Item to be discussed is how I will analyze my target market needs. This really depends on the country. In the United States M&M candies is mostly enjoyed by children and teenagers. In the late 1980’s the market of candies was not really growing too much. Between 1980 and 1985 the capita consumption of candy grew 17% as more adults considered candy as an acceptable indulgence (jiffynotes. com, 2010). Though in 1994 Mars Inc was a sponsor of the World Cup soccer tournament and some ads featured soccer players.
So therefore it can be marketed to all ages and all walks of life, not just children like in the 1980’s and 1970’s. In Russia for example it is not as welcomed as in the states. They felt that the American culture was being forced upon them (jiffynotes. com, 2010). The best channel of distribution considering what the product is would be indirect marketing channel. The reason for this is because you see Mars Inc as a international dominating candy and confectionary market. But in the same sense it uses different intermediaries or “middlemen” to distribute to.
The most commonly known are retailers such as Wal-Mart, Target, or Kmart. Another intermediary is grocery stores. This is a popular one because of how they are placed so conveniently close to the cash registers so that when people buy groceries and see the candies like M;M’s they say to themselves something like, ‘that looks good, I think I’ll buy it’ or something like that. Another major distributer is movie theaters. They use them to entice the customers to enjoy them while watching the movie.
So I believe that this type of product is more catered to the younger generation because of how nowadays the television ads and internet ads and paper ads show bright colors and colorful characters that make it seem like they are part of the “now generation”. When trying to decide how many channel members to use I need to take a look at the product and who it caters more so to. By looking at the product the best one possible would be intensive distribution. This is stocking the product in as many outlets as possible. This will provide maximum brand exposure to all consumers of all walks of life.
No other distributions such as exclusive and selective will not work as well as the one mentioned above. The reason why is because products such as M;Ms are major known global products and so therefore the more exposure to more markets the better off for the company in the short term and the long term. The best channel organization for this product would be a conventional distribution channel. The reason for this is because each individual outlet, retailer or wholesaler wants to make their own profit and maximize it such as Wal-Mart or Target.
They are rivals and compete with one another to be the best retailer available. But gaining in more popularity is the Vertical Marketing System. More precisely Franchise organization. This is because more and more companies are turning into giant franchises. Almost every type of company is a franchise and big companies such as Mars Inc are trying to distribute to bigger markets and franchises. In conclusion the best way to distribute the product, M;Ms is to market to well known stores and retailers such as Wal-Mart and Target. Consumers of all ages go to those stores as well as grocery stores.
Those places allow younger generations to shop for that product by having it conveniently close to the checkout stand. This allows the product o have maximum exposure and thus making companies like Mars Inc an international candy and confectionary giant. References Mars Inc: Target Market, jiffynotes. com, 1996-2010. Author Unknown, Retrieved September 12, 2010 from: http://www. jiffynotes. com/a_study_guides/book_notes_add/emmc_0001_0001_0/emmc_0001_0001_0_00171. html Marketing: An Introduction, Ninth Edition, Armstrong ; Kotler. 2009 by Pearson Education, Inc. Retrieved September 12, 2010