Marketing Assignement - Distribution Channels

Marketing Assignement - Distribution Channels

The Starbucks Company situated in Seattle is a multinational company that deals with numerous coffee blends of the Arabica coffeehttp://writers-corp.net. The company boosts of growth from a single store in 1971 to more than seventeen thousand stores in 2012. The stores are located in different regions across the world. It has the stores in South America, North America, Europe, the Philippines, Asia and the Arab Emirates. It has managed to grasps a large clientele and managing a good cash flow thereby leading to progressive growth throughout the period. The company however, is facing stiff competition from other companies like The Green Mountain Coffee Roasters Company which deals with making coffee (Michael, 2011). The company’s main targets are the neighborhoods where they set up stores for easy access of the customers. The company has franchised its services to store owners but regulate their service delivery to meet their reputable standards.

            The company uses the multichannel distribution channel whereby it incorporates both the multiple party distribution systems and the assisted marketing system(Michael, 2011). Through the multiple-party distribution channel, the company has multiple buyers who buy their products, and re-sell the products to the eventual clients. These are the franchised store owners from across the regions. However, the company also has a direct marketing system which is a type of a direct distribution channel. Through this system, the company delivers the coffee beans to its own store across the regions and deal directly with its clientele.

The company enjoys numerous benefits by their use of the intermediaries. Through them, the company is able to access a large market. This assists in increasing their market share. Moreover, the company saves on cost of distribution since the registered distributors’ curry some burden of the distribution costs (Michael, 2011). With increased market access, the company is able to increase their earnings and increase their revenue. Increased revenues and reduced costs lead to an increase in their profits. Other benefits that the company enjoys are reduction of time wastage through a lot of activities that involves distribution.

The distributors are selected through a competitive process whereby only the best that suit the companies’ criteria are selected. Mostly, the distributors financial capabilities are assessed and their experience in the field. Moreover, they are trained by attending to seminars organized by the company and informed of any emerging trends of doing the business. The distributors are evaluated after every financial year. The contracts of the distributors who do not perform as expected are not renewed.

References

Michael (2011).Distribution Systems. Online Distribution Systems Tutor & Homework.     Retrieved on 25th may 2012        fromhttp://www.tutorsonnet.com/marketing_homework_help/distribution/distribution_sys            tems_assignment_help_tutoring.htm