Zero level of distribution

Dell is a US multinational computer technology company that develops, sells, repairs, and supports computers and related
products and services. Named after its founder, Michael Dell, the company is one of the largest technological corporations in
the world, employing more than 145,000 people in the U.S.

Founded February 1, 1984; 35 years ago

Founder Michael Dell

Headquarters Round Rock, Texas

U.S.[1]

Area served Worldwide

Key people Michael Dell

(Chairman & CEO)

Jeff Clarke

(Vice-Chairman, Products & Operations)

Karen Quintos

(CCO)

 Personal computers
Products
 Servers

 Peripherals

 Smartphones

 Televisions

Revenue US$78.7 billion (2018)[2]

Number of employees 145,000 (2018)[2]

Dell distribution channel

Dell was established in 1980 by Michael Dell at the age of 19 when he decided to cut out the
middle man and directly connect himself with the customer supplying computers without the
expense of a distribution channel. Initially Dell was distributed directly to customers as they
were able to order a computer made to their individual selections, with a gross turnover of $73
Million in the first year of trading it seemed that Dell was going to be tough competitor in the
Personal Computer Market.
Manufacturers selling direct to the consumer as Dell did eliminates costs associated with
marketing and distribution as there is a reduction in the number of links between the product
being sold to the consumer and the consumer buying the product. Dell has used many different
channels to sell their PC’s over time such as computer stores, department stores, over the
phone, Ebay and of course their website. A computer is relatively easy to transport and can be
easily distributed from the manufacturer to the consumer. Whilst it may be a difficult purchase
for some consumers Dell has partnered customer service with their product and offered
consumers the ability to order a computer which is made to their specific selections known as
“Configuration To Order “. This removes the need for consumers to go into a retail outlet to
make a purchase. Consumers can call Dell during the purchase process or request sales
assistance online and receive a cal back within approximately 48 hours. As can be seen below
in the diagram the intermediary such as a retail outlet is removed in Direct Channel Marketing,
which occurs when purchasing directly from Dell’s website.

By removing the Intermediary in the channel process this enables Dell to

have greater control over their product and control the price as there is
no retail outlet attempting to price cut their product (Iacobucci, 2014).
This is a an essential marketing strategy for Dell as they target
consumers looking for the convenience of purchasing a PC which is
tailored to their needs at an affordable price with comparable quality to
the store brought product. A Direct Chanel is easy for the consumer
and fits with Dells’ consumer behaviour.
In 2001 Dell became the world’s number 1 computer systems provider. With years of
experience configuring PC’s to order Dell knows what their consumers want and have recently
developed a growth plan for the future which meant a change in their ability to distribute their
products sooner. Dell has developed “Smart Selection” which involves pre-building what they
think their consumers want to enable mass production of PC’s and enable them to ship within
24 hours. This enables Dell to compete with their competitors and reduce the wait time for
commercial consumers which was previously seven to ten days. With Dell now offering their
commercial companies the option to have their approved custom software image added by
allowing 48 hours for shipping. They have continued with their brand segmentation by allowing
commercial companies to also make purchases that are quick, convenient and have the ability
to be configured in a small way to their needs, building upon their position in the market and
continuing to collaborate with customers.

2 level of distribution

Colgate (toothpaste)
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Colgate is an umbrella brand principally used for oral hygiene products such
as toothpastes, toothbrushes, mouthwashes and dental floss. Manufactured by the American
consumer-goods conglomerate Colgate-Palmolive, Colgate oral hygiene products were first sold by
the company in 1873, sixteen years after the death of the founder, William Colgate. The company
originally sold soap.
According to a 2015 report by market research company Kantar Worldpanel, Colgate is the only
brand in the world purchased by more than half of all households. Colgate has a global market
[1]

penetration of 67.7% and a global market share of 45%. Despite this, it maintained the highest
[2]

growth rate of all brands in the survey, with 40 million new households purchasing Colgate-branded
products in 2014. Its global market penetration is nearly 50%; higher than the second-placed brand
[3]

in the study, Coca-Cola with 43.3% penetration.

1.1 Marketing Channel Strategies:

The company had 1713 direct stores as of may 2010. The oral care distribution network is
distribution network is spread across 90 cities in India. The company products are available
across 4.3 mn retail outlets. Flag ship Brand – Colgate Dental Cream is the largest distributed
product in the Toothpaste market available in 4.1 MM stores. Serviced by Company field force,
more than 1800 stockiest & super stockiest & their field force
Colgate uses different marketing channel strategies for its different toothpaste product. We have
analysed some of the marketing channel strategies used by Colgate Palmolive:

1.1.1 Channel of distribution:

A set of interdependent organizations that help make a product or service available for use or
consumption by the consumer or business user. Colgate Palmolive uses all the available
intermediaries wholesalers, retailers, and stockist. Distribution strategy for the Colgate Total is
Indirect. It is through Dentist, plastic surgeon, drug stores, grocery stores, large retail stores and
department stores.

1.1.1 Channel level

A layers of intermediaries that perform some work in bringing the product and its ownership
closer to the final buyer. Colgate Palmolive uses level 2 channel level containing wholesalers
and retailers.
1.1.2 Channel conflict
Disagreement among marketing channel members is generated when one channel member’s
action prevents another channel from achieving its goal. Colgate Palmolive fallow the
traditionally distribution channel not involving overlapping of intermediaries so there is very less
amount of channel conflict.

1.1.3 Intensity of distribution

As the product is daily useable commodity so the company is using intensive distribution.

1.1.4 Multichannel distribution system

As the time changes the companies changed from single channel distribution system to the
multichannel distribution system, often called as hybrid marketing channels. Multichannel
marketing occurs when a firm sets up two or more marketing channels. With each new channel,
the company can expand its sales and market coverage. But those are hard to control, and may
create conflicts. Colgate Palmolive uses the Multichannel distribution.

1.1.5 Recommendation

 Dentist’s plays a big role in the distribution of oral care products. Colgate Palmolive
should more focus on distribution of toothpaste in dentists’ offices.
 Colgate Palmolive should focus more strongly on other retail locations, even it adapted
intensive distribution there is still scope of other retail location where small unknown
brand capture the market share.
 Colgate could direct market the toothpaste by sending special coupons in the mail to
consumers, or by offering rebates to consumers who purchase other Colgate-Palmolive
oral care products.
 The toothpaste could be distributed through plastic surgeons because many people who
visit a plastic surgeon are concerned about their appearance, and would likely consider
the different options available to them that will enhance their appearance, such as their
teeth.
 It could be distributed through make-up departments because most people who shop for
make up at large department stores are also concerned with looking their best.
  The company can approach the government to distributing the products in military
canteen or other organisation which needs these oral care kind products.

 The company can come up the concept of forming a retail chain of oral care products
across all over India as it is follows the marketing strategy of Umbrella branding.

1.2 Distribution Channel

The most important part of marketing is how a product will arrive from the seller to the buyer.
Many products go through a channel of distribution, which involves manufacturers, wholesalers,
retailers, and consumers. The distribution strategy proposed is through dentists, plastic surgeons,
drug stores, grocery stores, large retail stores, and department stores. Therefore, Colgate Total
channel system is indirect because its consumers are spread throughout many geographic areas
and often prefer to shop for certain products at specific places.
Beside convenience stores and large retail stores, many food stores play a key role in the
distribution of oral health care products. “Mass merchandisers gained share due to increased in-
store promotional support”. Because of the increase in the demand for oral care products, stores
began shelving more oral care products. This is a big advantage for Colgate because there would
be more room in the stores for them to market the new Colgate Total. Dentists also play a big
role in the distribution of oral care products.

3level of

Kurkure is a brand of corn puffs, produced and developed by PepsiCo India, the Indian division of PepsiCo.[1] Named after
the Hindustani word for "crunchy", the snack was developed entirely in India. It was launched in 1999 and has its automated
plants at Channo (Punjab, India), Kolkata and Pune.

Named after the Hindi word for "crunchy", Kurkure is a cheeto-like snack and is the flagship of
Frito Lay's Indian division. It is marketed by Hirani Industries Corp. (USA incorporated
company) in Kenya. It is one of the most popular food products in India today. The snack comes
in 4 flavors. They are Masala Munch (orange pack), Green Chutney Rajasthani Style (light green
pack), Chilli Chatka (dark green pack) and Tamatar Hydrabadi Style (brown pack). There are
two new flavors too. One is the Kurkure Xtreme Electric Nimbu and the other is Kurkure Xtreme
Risky Chilli. A Special Edition flavour, Jaljhalo Hit has been released as a Pujo Special for
Durga Puja, 2007. Snacks are of two types extruded & potato chips, Kurkure is the extruded
snack item.

Distribution Strategy

A manufacturing company manufactures products. It then needs to deliver the manufactured

products to the consumers. Many times, the place of manufacturing and the place where the
consumers require the products is very far away from each other. Kurkure has its three
manufacturing locations - in Channo (Punjab), Kolkata and Pune but its customers are all over
India. So, Kurkure needs to set up an efficient distribution system so that the products reach its
consumers.

Kurkure is manufactured in in Channo (Punjab), Kolkata and Pune. From there it is distributed
all over India and it is available at the local store near you. The distribution guys have to make
sure that, every little "banya shop" on every little street of our extremely large country gets
Kurkure snacks. And while the distribution guys do all this, they have to make sure they keep the
costs under control.

This makes one think that the distribution guys do a whole lot of work. However, in practice
what they do is, set up distribution channels.

Distribution channels
Distribution channels are all the sub-marketers or intermediate marketers of the company. For
example: selling agents, wholesalers, retailers, authorized representatives; showrooms etc. are
basically distribution channels.

The distribution channel for kurkure product is:

Manufacturer - Wholesaler - Retailer – User
Manufacturer - Distributor - Wholesaler - Retailer –User

 All of these members of the distribution channels also want to sell the products that they
hold so they too try to market the products in their own small way.

 The local "banya shop" will keep his shop stocked with the Kurkure Snacks packets so
that he does not lose business from customer who asks for Kurkure.

 Using these distribution channels the company can sub-market its product at various
localized levels. Using these distribution channels, the company can market its self in all
the local neighbourhoods and streets of the country.

 The company has to give some commission to the people along the distribution channel.
It also gives incentives to them if they sell more products. This way, the distribution and
marketing of the product takes care of itself to some extent.

 In some cases having distribution channels may prove to be costly as the price of the
product rises at every level.

 So, a company may choose to by-pass all distribution channels and directly market the
product and deliver it to the consumer itself. However, whatever the method of
distribution used, kurkure still have to reach the distribution channels or the consumer
from the point of production

Distribution Channel Adopted by Kurkure

Distribution is also one of the key parameters for expanding market share. Frito-Lays has
the advantage of access to Pepsi's a formidable distribution network .Generally Companies are
having their sales vehicles that are loaded on daily basis and are distributed to local retailers.
Some companies appoint Distributors. Distributors have to give a proposal with a market
research like storage facilities, infrastructure, and retail outlets in area, market leader, types of
products available in the market etc. The Kurkure products are delivered to the retailer twice a
week. The products are generally sent in Boxes on an average each box contains 80 packs of 30
gm or 30 packs of 150 gm.

Distributors are solely responsible for the sales in the particular area he is operating in.
Every Distributor should have a specified number of minimum shops in his area. Distributors
generally have small vans (rickshaws) and employ salesmen on commission basis who loads the
products from the distributor’s storage and distributes it amongst the retailers. It services one-
lakh retail counters across the country by employing a total strength of 300 sales personnel and
distributors nationwide.

1 level