Advantages of Warehousing

As marketers realign their operations to adjust to a lower level of demand, they will face a number of difficult choices. Decisions taken today will have a major impact on customers and channel partners both in the near term and in the long term. It is essential that marketers get these decisions right and are able to execute them cost effectively while avoiding lapses in customer service.

The industrial distribution network has many players, and manufacturer can choose from a multitude of internal and external distribution channels. Internal channels include the Internet, direct sales forces and key account teams. External channels include small distributors, large distributors (both low- and high-service) as well as exclusive or semi-exclusive dealers for branded manufactured products.

Maximising the potential of distribution channels and marketing programs in today’s economic environment involves taking these actions:

(i) Identify the best partners: The first step involves taking a hard look at current channel design. Companies need to understand their most profitable and highest potential customer segments and how well those segments align with existing channels. This understanding requires a clear perspective of how units, revenue and profitability flow across sales channels, products and regions. It also requires a strong knowledge of how well a company’s value proposition aligns with channel partners in addition to end-users.

After identifying the most profitable and promising segments, it important to determine how well current channel partners align with those segments. In evaluating channel partners, first determine how well each partner aligns with the company’s value proposition and the most profitable customer segments. Secondly, given the current environment, also pay particular attention to a potential partner’s financial strength and strategic position. All else equal, companies will want to place their bets with channel partners that will be around for the long term.

(ii) Get the most out of your marketing: The second step consists of a review of marketing programs in the context of key target segments. Determine which specific demand generation programs and promotions (e.g. direct mail, trade advertising, broadcast advertising, incentives) have worked better than others at generating and converting qualified customer leads. Evaluate the performance of various marketing programmes in different regions, segments and markets and how well sales results have correlated with those efforts. Based on a careful review of what has worked best, opportunities will emerge to rationalise some of these marketing programmes.

Look for opportunities to renegotiate terms with channel partners as well as other sales support relationships (e.g. PR agencies, advertising firms, printing companies). Channel partners may be willing to offer better sales terms or improved product positioning, including increased “shelf share” or even product exclusivity. Sales support providers may be amenable to renegotiating pricing arrangements to maintain business relationships.

(iii) Manage the transition: Once channel design and resource allocation have been addressed, implementation needs to be carefully planned. In many cases local market variations will require significant adjustments to the overall direction. Some channel partners are likely to require more support than others as they take on new customers with potentially different service requirements. Throughout any transition, communicating closely with target partners is essential to manage channel conflict and minimise negative customer impact.

(iv) Advertisement and promotion: The four Ps of marketing are product, price, place and promotion. All four of these elements combine to make a successful marketing strategy. Promotion looks to communicate the company’s message across to the consumer.

One of the benefits of advertising is that it gives you the opportunity to communicate a message to a large audience at one time, reducing the cost per contact.

You may have the finest product and the most attractive prices, but if potential customers don’t know about your business, your chances of success are limited. Advertising and promotion refer to activities undertaken to increase sales or enhance the image of a product or business. Advertising is used primarily to inform the potential customer of the following:

(i) The availability of products or services;

(ii) When they are in season;

(iii) Where you are located and;

(iv) Anything special about your product.

Promotional activities are important for maintaining customers’ traffic throughout the market season used early in the season to draw customers to your business and during the season to maintain customers’ traffic levels during se slow periods.

Deciding on a marketing communications strategy ge is one of the primary roles of the marketing manager and this process involves some key decisions about who the customer is, how to contact them, and what the message should be.



1. Explain the following actions before marketing:

(a) Mobilisation of workforce

(b) Production of quality goods and services

(c) Managing distribution network.

2. List and explain the four elements of marketing mix.

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