This document discusses distribution channels and provides an example of Cathay Pacific's successful strategy. It defines distribution channels as connecting producers and consumers by making products available at the right time, place, and quantity. Distribution channels perform logistics, facilitate additional services, create efficiencies through bulk breaking and assortments, and share risks. The document uses Cathay Pacific as an example of a company that launched an employee advocacy program to position its staff as travel experts, strengthening its distribution network through social media engagement.
2. MANAGING DISTRIBUTION CHANNELS CAN BE CHALLENGING EVEN FOR
THE MOST SUCCESSFUL COMPANIES. THAT'S BECAUSE THERE ARE SO
MANY VARIABLES TO THINK ABOUT—ESPECIALLY IN THIS PERIOD OF
SOCIAL MEDIA AND TECHNOLOGY. FAILING TO PUT IN A GOOD STRATEGY
TO MANAGE THESE CHANNELS CAN LEAD TO A POOR BUSINESS MODEL
AND EVEN HIGHER COSTS.
MANY COMPANIES INCREASE THE NUMBER OF DISTRIBUTION CHANNELS
THEY HAVE TO BOOST THEIR PROFITS ,WHY? HAVING MORE CHANNELS
MEANS GETTING MORE OF YOUR PRODUCTS AND SERVICES TO
CONSUMERS WHICH TRANSLATES TO MORE MONEY. THIS CAN BE
TRICKY—ADDING MORE LAYERS TO THE BUSINESS MEANS THE NEED FOR
MORE OVERSIGHT. BUT A COMPANY WILL NEED TO SPEND MORE TIME
AND MONEY INVESTING IN THIS KIND OF STRATEGY. COMPANIES CAN
EARN MORE REVENUE AND PROFIT BY INCREASING THE EFFICIENCY OF AN
ALREADY ESTABLISHED DISTRIBUTION CHANNEL.
Increasing distribution Channel efficiency
3. FUNCTION OF A DISTRIBUTION CHANNEL
Functions of Distribution Channels
In order to understand the importance of distribution channels, you need to understand that it
doesn’t just bridge the gap between the producer of a product and its user.
• Distribution channels provide time, place, and ownership utility. They make the product
available when, where, and in which quantities the customer wants. But other than
these transactional functions, marketing channels are also responsible to carry out the
following functions:
• Logistics and Physical Distribution: Marketing channels are responsible for assembly,
storage, sorting, and transportation of goods from manufacturers to customers.
• Facilitation: Channels of distribution even provide pre-sale and post-purchase services like
financing, maintenance, information dissemination and channel coordination.
• Creating Efficiencies: This is done in two ways: bulk breaking and creating assortments.
Wholesalers and retailers purchase large quantities of goods from manufacturers but break
the bulk by selling few at a time to many other channels or customers. They also offer
different types of products at a single place which is a huge benefit to customers as they
don’t have to visit different retailers for different products.
• Sharing Risks: Since most of the channels buy the products beforehand, they also share the
risk with the manufacturers and do everything possible to sell it.
• Marketing: Distribution channels are also called marketing channels because they are
among the core touch points where many marketing strategies are executed. They are in
direct contact with the end customers and help the manufacturers in propagating the brand
message and product benefits and other benefits to the customers.
4. CATHAY PACIFIC : EXAMPLE OF A COMPANY USING
A SUCCESSFUL DISTRIBUTION CHANNEL
In an effort to drive brand awareness, engagement, and revenue, Cathay
Pacific, an international airline, recently launched an employee advocacy
program. The program brings various types of employees (pilots, baggage
handlers, flight attendants, etc.) into one app to easily access the best
content on travel.
Access to this content has positioned its employees as worldwide experts
and thought leaders in the industry. If you have travel questions or just
want to find some inspiration, Cathay Pacific’s 30,000 employees are there
for you on every social media channel.
As the wheels are beginning to spin, you’ve probably realized that
employees play a pivotal role in creating a successful distribution strategy.
Therefore, you must ensure every staff member in every department is
highly informed and educated about the brand, its mission, and its core
values.
It’s time to quit relying on outdated content distribution channels. In this
social media-driven world, employees are now the key carriers of a brand’s
message. They’re the ones marketers need to count on when it comes to
building strong relationships with potential clients.
Brands that make content friendly and easy to access are the ones that
have mastered modern distribution.
