The Marketing Mix: Distribution (Place) Strategies

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Today’s world is constantly changing and growing, making the need for easily accessible goods and services a must for many people. Trying to answer that need is British supermarket giant, Tesco. Tesco will launch a new store that will try to revolutionize the way shopping in America is done by opening small, shopper friendly stores in more urban areas. (LA Times, 2007) This approach will try to change the current view of American grocery shopping in a large centralized store, to that of a more convenient, localized shopping experience. Will they be able to take on the established grocery store giants of the United States? I think that Tesco will ultimately fail in their pursuit of changing the way Americans shop, while the appeal of small local stores works well in the UK, Americans like the options larger more diverse supermarkets make available. Additionally, their goal of opening 21 stores in Phoenix alone, and maybe up to a 100 total this year, will tax their current distribution channels beyond recovery in more than one way. (The Economist, 2007) While their idea is innovative, they lack the clout or name brand appeal that will draw consumers away from current grocery stores. In order to better understand that we should look more closely at distribution channels that will affect Tesco’s campaign across America. Channel distribution can be broken down into three different systems: direct, indirect, and multi-channel. (Christ, 2008) The direct distribution system can be summed up by, “marketer reaches the intended final user of their product by distributing the product directly to the customer”. (Christ, 2008) Essentially, Tesco would be the only partner in their distribution channel. In indirect distribution “the marketer reaches the intended final user with the help of others”, basically there are more parties involved in selling the product to the end user. (Christ, 2008) Finally there is multi-channel distribution. Multi-channel distribution...
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