Distribution

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Distribution

One American academic has gone on record as saying "The study of distribution channels, and why they take various forms, is one of the most neglected areas of marketing today." You can say that again, and not just about marketing academics, either. For many of Us, distribution channels are fixed, the marketing equivalent of the legislative code of the Medes and the Persians. We know very well that changing established channels is one way, and a very good way, of stealing a march on our competitors: we also know it is a very good way of going broke, so we let well alone. When we enter a new market, we know that innovation in distribution can lead to quick success: we also know it can lead to even quicker failure, so we follow the leader. Just occasionally, some provocative fellow (probably one of those long-haired theorists) refuses to accept the conformist status quo and literally spoils the market. Then the channels change underneath us, the goods flow through other outlets, and we are left high and dry. At least we do not get our feet wet on the way to the Labour Exchange.

All this means that there are very few textbooks on distribution channels and that we ought to read very carefully those that there are. Perhaps first of all we should read a general description of distribution patterns and their development. None is better than The Changing Pattern of Distribution, by Stacey and Wilson (with several recommendations).

But after that we should be seeking the theory of distribution, the concepts and the tools that will help us to think our own way through our own particular problems, to evaluate - or even simply to recognize - the opportunities that arise. For this we need a book that prescribes rather than describes. In fact, we need The Marketing Channel - A Conceptual Viewpoint (edited by B. E. Mallen). It is a collection of articles again, analytical rather than descriptive, theoretical and proud of it, and recommended in a number of reading lists. Read it, convert the principles into practice, and send your competitors dry-shod to the dole queue.

If you are one of those unfortunate marketers who are also responsible for physical distribution, you will not have missed the review of Marketing Logistics and Distribution Planning in the October issue of Marketing. "Unfortunate" is perhaps an unfortunate word, since the declared aim of the book is to tie physical distribution planning in with the total marketing plan. But do get your channels right in marketing terms before you start to drive your lorries along them.

Marketing is all about profits, and a crucial factor in profits is price. So you would naturally expect that pricing strategy would be a constant preoccupation of the marketing executive. We all know, regrettably, that it is not. In fact, after distribution channels, pricing strategy (as opposed to today's price levels) is one of the last things he thinks about. It is the same, just for once, in the US: Udell undertook a small survey and concluded that "Business management did not agree with the economic views of the importance of pricing - one half of the respondents did not select pricing as one of the five important policy areas in their firms' marketing success."

Of course, in certain markets, such as the organized commodity markets, price is dictated by external factors, and the individual company has little or no room for manoeuvre. Others have long ago given up price theory as the over-simplified domain of the impractical economist. In fact, it is only in the last 25 years that marketing academics have turned their attention seriously to the practical application of price theory.

All this means that literature on practical pricing policies is even more limited than that on distribution. There can be no question of selecting a simple introduction and one standard work. For pricing strategies (and the basic economic theory behind them) try Robert A. Lynn, Price Policies and Marketing Management. For an accounting-oriented approach (but one which will help you to beat the accountant at his own game) try Pricing for Higher Profit, by Spencer A. Tucker.

Neither of these two American books received more than the odd mention in the reading lists, but it would be as well to get them under your belt before you tackle a longer British work, well recommended in the reading lists, Pricing Strategy (edited by Bernard Taylor and Gordon Wills). The book is another collection of papers by leading authorities and, with the best part of 600 webpages, a pretty formidable collection at that. But you will not need to read it all - not every article will be relevant to your problems - and it would be surprising if you did not find something in it that was not only of interest but of practical value in improving the profits of your company.


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