What Are the Cons of Distribution Channels?ġ. With specialization in place, this issue may not always be eliminated, but it does give end users a point of contact with the organization and this can become the foundation of a relationship. End users are only loyal to the lowest possible price that is available. The problem with a mass marketing strategy is that unless the brand awareness is fully saturated, there is no real loyalty that is created in the engagement with the distribution channel. Specialization of the regional process creates better overall effectiveness. Instead of a large upfront investment, all that is typically required is a small, manageable ongoing investment whenever communication or product distribution needs to happen.Ħ. Because there is no need to create a new channel, the actual expenditures to reach a targeted demographic are often quite small. The average organization can take advantage of existing channels that exist within each region they wish to target. Distribution channels don’t cost much to get started. Because there are such broad levels of coverage through an effective distribution channel, the organization can reach a vast majority of those within their targeted demographics so very few individual end users feel left out.ĥ. If one set of customers in a targeted demographic receive products and marketing effectively and another region feels like they’re left out, then this can create discord within the customer base. No customers feel left out when distribution channels are used appropriately. By knowing what the customer purchasing habits happen to be in a specific location on the globe, the company’s specialists can tailor their marketing messages and products to meet these expectations so a meaningful value proposition can be offered.Ĥ. Distribution channels still offer some level of end user knowledge.Īlthough there are fewer opportunities to interact with specific end users, an organization that uses distribution channels can be aware of regional influences. Because the channels are automatically in contact with the end users, implementing a contact to a targeted demographic is easy and delivering wanted products is even easier.ģ. Mass deliveries are much easier to accomplish with a good distribution channel. There are options available which allow for rapid distribution. Instead of an individualized approach, the distribution channel can reach multiple end users simultaneously with a consistent message. It provides businesses with a greater level of cost efficiency.īecause sales are handled through the distribution channel instead of directly to the end customer, then the ability to sell becomes easier and more efficient. What Are the Pros of Distribution Channels?ġ. Here are some of the key pros and cons to consider on the subject. Should your business be selling through distribution channels? It isn’t always necessary to create these channels to build a foundation of financial success. If they aren’t successfully created, then the business may be one step closer to closing for good. When these channels are successfully created, then the possibility of growing more opportunities becomes accessible. When the decision is made to sell through them, there must be a balance in place which allows the organization to meet the needs of their customers while still maintaining a level of profitability. One of the biggest challenges that faces the modern business is the creation of distribution channels.

Pure point measure distribution