Distribution Channels : Vertical Chains Essay

Distribution Channels : Vertical Chains Essay

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Overview of Distribution Channels
Vertical chains can be long or short depending on the intermediaries involved. In this style, the manufacture is at the top of the chain with all others following behind or below. For example, the chain will start with the manufacturer, followed by logistics, and scheduled retailers along the transportation route. These stops can include storage locations, online warehouses, and other logistic agents.
A horizontal channel makes up two companies meeting up at the same point in a target market with similar needs to offer different product(s). Many companies are starting to use this style of marketing to the target markets. For example, the soap can be offered to guests at a hotel for those with allergy or special needs. Since the soap is organic, those customers who prefer an organic product can request the soap.
A multichannel is using more than one channel for a product. For example, the soap can be offered in a retail store, online, and specialty shops. This is using many channels to promote and sell the soap to consumers. This can be beneficial to the soap product because not only can the consumer purchase at their favorite location, but also at specialty shops (organic and health stores), and online. Combining with horizontal channel, such as a four- or five-star hotels, the soap can reach those consumers who may have forgot soap or realized a need when away from home.
Target Market’s Needs in Distribution Channels
The consumer wants to have a product that is affordable and of high quality that will justify the price of the product. The ease and ability of being able to purchase the product where the product qualifies and fits the channel benefits the consumer. Whether the purchase is through a...

... middle of paper ...

... price low enough for all consumers to be able to purchase and yet high enough to make a profit to continue a beneficial process.
Channel Organization
The organic soap will include the following channel organization: the manufacturer, logistics, agent, wholesaler/retailer, and end user. The agent will ensure that all wholesalers and retailers that want to sell the product are provided the opportunity. The agent will also ensure that the product is sold online through appropriate channels. (Reference of Business, n.d., Benefits of Intermediaries) For the purpose of the organic soap, the company has chosen to use a multichannel distribution option. Because the organic soap will be sold in wholesale/retail locations, as well as in the private sector, such as hotels, and online, the multichannel will allow all these channels and then more should the opportunity arise.

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