Distribution and logistics come under the “place” aspect of the marketing mix. they deal with specifically, how goods are supposed to reach the final consumers from the producers or manufacturers. There are multiple channels available to any business, it can sell its products directly to the consumers by having its own dealerships or stores, it can use retailers and other middle men to transfer ownership of the finished goods to the final consumers.
The type of the product and its nature generally help the marketing managers decide on which channel of distribution they should select.
In the past 15 years with the internet becoming increasingly more and more advanced.the trend of online shopping started with more and more consumers opting to order something online as it was easy, and much more convenient (The Economic Times, 2008). This sort of service generally makes sense for products that are customisable and need consumer input to make them better, also products which have multiple sellers and are available in abundant types for consumers to choose and decide from for example, clothing and accessories. Here are a few pointers as to how companies select their distribution network.
For this blog, lets take the example of Rolex Watches. Rolex is a Watch Manufacturing brand which was formed in 1905 by Hans Wildorf and Alfred Davis in London,England. it moved its operations to Geneva,Switzerland in 1919 (Rolex, 2015). Rolex Sells its products and watches in its own retail stores with staff who are informed about their products sold and their specifications.
Since Rolex is a luxury brand, its distribution channel is such that it signifies uniqueness and prestige. The official Rolex website only lets prospective consumers look at the products it sells and decide for themselves if they want to get it or not. The prices are not listed on the website, in fact, customers have to go to the official retailer themselves and get more specifications of the product they are interested in buying from store employees.
This strategy has worked well for Rolex as it promotes itself by advertising and billboards during High profile events such as the Australian open and Wimbledon in the Tennis circuits, the US open in the Golf circuit and a few other major sporting events such as the Formula one series, here are a few strategies used by Rolex in the last 109 years of its being. One such example can also be given on the Bloodhound SSC, which has chronographs and their speedometers all designed by Rolex.
The main focus of Rolex also is enhanced and focused upon by the company having A- list athletes in these sports endorsing their products, the likes of Roger Federer and David Beckham,these are athletes people aspire to be and have done very memorable things in their respectable sports. These promotional tactics along with the exclusivity of their distribution channels make it a really good combination for Rolex to maintain their brands image and have their target market, the higher income, affluent male market really interested in their products, to some extent Rolex has even started targeting the female market now by having celebrity endorsers like Cameron Diaz.
when speaking about logistics, Rolex watches are extremely brand image oriented, the retailers selected are scrutinized very heavily and it is made sure that they enhance the brand image. the physical distribution of these goods depends solely on the number of retailers in a certain area, customers are also offered long term warranties on their products or any Rolex product purchased, the same goes for customer service, which until very recently did not exist and now the company is trying to “humanise” their brand.
In concluding words, Rolex is a highly difficult brand to understand as they are very different than other watch manufacturers. but it has a 109 year old reputation of being very trustworthy. this means the Rolex company is doing something right.
Boone, L. and Kurtz, D. (2016). Contemporary Busines. 14th ed. p.416.
Epstein, E. (2014). [Blog] Rolex: How a 109-Year-Old Brand Thrives in the Digital Age. Available at: http://mashable.com/2014/04/17/rolex-marketing-strategy/#cRUVATJirGqi [Accessed 16 May 2016].
timesofindia-economictimes. (2015). What is online shopping?. [online] Available at: http://articles.economictimes.indiatimes.com/2006-12-25/news/27439230_1_online-shopping-online-presence-online-purchase [Accessed 16 May 2016].
Rolexforums.com. (2016). Logistics of purchasing from an AD – Rolex Forums – Rolex Watch Forum. [online] Available at: http://www.rolexforums.com/showthread.php?t=437147 [Accessed 16 May 2016].