Lack of distribution can be a major cause of new product failure. But, what constitutes "adequate" distribution, and how should the manufacturer set about obtaining it. This is the subject of this paper presented in three closely-linked sections : 1. An historical review of the distribution levels achieved by 29 new food products launched nationally between 1962 and 1967 in the United Kingdom. This is mainly based on Nielsen data; 2. Why some products fail to achieve adequate distribution. This section is largely based on a pilot survey in ten large United Kingdom retail or multiple groups at Head Office buyer level. This survey was initiated by Benton & Bowles Ltd. , and carried out by Hurdle and Trew, an independent research organisation; 3. The use of sales promotion techniques to achieve initial distribution and improve it through the critical first year of the new products life. Throughout the paper we are referring to fast-moving grocery products and not to consumer durables.
The Netherlands can be characterised as a small, heavily urbanised country, with a quickly growing population. On one hand the population is very young, + 28% below 14 years of age, on the other hand rather old; 14% over 65 years. The western part of the country is threatening to become one very big conurbation, consisting of 6 or more major cities with Amsterdam, The Hague , and Rotterdam as centres of gravity. Contrary to the existing image abroad of Holland the main sources of income are industry and services.
This paper outlines the basic steps that should be taken by manufacturers setting out to plan and implement distribution policies for their products. The steps relate specifically to mass market consumer goods and although many of the statistical examples quoted are taken from the United Kingdom Grocery Market, they are deemed to be typical of most of the major consumer goods markets throughout Europe. During the course of the paper, reference will be made to the experiences of United Biscuits in the U. K. Biscuit Market and to some of the research information which has helped us to formulate and control our own distribution policies. Again, although these references are to the specific, they are used to demonstrate general points of principle which are likely to apply, to varying degrees, in most consumer goods industries.
Nowadays there are a lot of measuring methods which allow us to control various marketing-measures and to estimate their chances of success. Product testing, work with test markets and the more conventional methods of research in markets and motivations are reducing the risks for the enterprises. On the other hand, media-research, copy-tests and the measuring of advertising effectiveness and a few of sophisticated techniques in the marketing-communication-area give us quite a lot of data which are rather significant. All these results don't guarantee the final success in business, but make it more probable. INFRATEST Munich made various studies on these subjects. Their aim was to measure this service-behaviour, the influence of particular factors and to quantify the results. In doing so an opportunity for a general improvement of service-behaviour was created, which allowed interested firms to make corrections and improvements on the basis of empiric data. Three studies will be presented here. The first one took place in self-service-shops for food and was carried out in co-operation with the dipl.oec.publ. Roland Berger International Marketing Consultants. The second study was directed to female shop assistants in retail-business-shops of the brassiere and corset branch. The third study took place in travel-agencies. Detailed statements will be given separately for each study; at first, however, some observations about the method, which is similar for all three studies.
For many years IBM has been conducting a long-range investigation into the future of retail data processing. It was and still is our aim to design methods and techniques which will allow an automatic replenishment of the items carried in department stores, chain stores and food chains. The system is known under the name Retail-IMPACT. It has been clear from the beginning of our studies that not all types of merchandise would respond to the same system. We believe that for replenishment and inventory management purposes the merchandise can be divided into four major classes: Big ticket, fashion, staple and grocery. However, it is not possible to draw a straight line between these classes. For inventory management, big ticket items or dry grocery may well be treated like staple items. On the other hand, the decision if an item is fashion or staple may be very hard to make in today's volatile market environment.
An inductive approach is presented in this paper. This approach involves the following stages: The detailed discussion of a study which attempted to identify different market segments to which four separate retail establishments have been catering; the construction of what is termed a segmentation Index; the analysis of universality of the segmentation Index ; and finally the construction of a logical flow model as a guideline for development of a segmentation Index. The largest section of this paper which is the detailed discussion of an empirical study is based on an analysis of the characteristics of typical customers of four retail stores in buying wall-to-wall carpeting. The present article offers a brief discussion of the criteria that can be used for segmentation, the findings of a field study are presented, and finally, an attempt is made to measure the segments on the basis of an index and to focus upon the role of segmentation in the struggle for survival.
In this paper, we have tried to analyse the way in which middlemen intervene in a channel, how they are organised for competition and cooperation, how they can be motivated.
With the constant evolution of techniques available for gathering and interpreting objective information on consumer's behaviour, it is of increasing interest to consider the possibility of using more scientific methods on which to base the policy and planning of distribution enterprises. Among these methods are those of Marketing Research which have now been tested for some years in the field of retailing, and the time seems therefore ripe to consider how valuable an aid to profitability these methods have proved on the two important aspects of: 1. Research with a view to opening new points of sale 2. Research to establish the main lines of the commercial policy of a distribution enterprise. For each of these problems the methods of research will be outlined and their practical advantages as well as the advisability of adapting them according to each particular type of retail a enterprise (Department Stores, Chain Stores and independent retailers) will be considered. It is perhaps useful to add that although in the present report only retail outlets are considered, many of the methods mentioned are adaptable to similar problems facing other enterprises providing services to the public such as Cinemas, Restaurants, Banks, Travel Agencies, etc.
The aim of the paper is to use computer simulation models of an entire industry's distribution channel as instruments of theory development. The major phenomena to be explained center around recent developments in distribution systems, resulting from advancing technology in the logistics of distribution as well as in communications between the various levels of the channel. Dynamic instabilities and various adaptive response patterns are found to be explainable more immediately by the hierarchical nature of the feedback-control relationships prevailing between various levels of the distribution channel than by environmental changes reflected in demand patterns.
A frequent problem in marketing research is how to collect information on the consumers of a product, which has a small market share. If a product is used by 5 out of 100 housewives one will need 4.000 interviews to reach a sample of 200 users. Many products have a market share which is still smaller which makes it even more economically unrealistic to do research by traditional sampling methods. This problem is especially acute when a new product is launched and information is needed on the consumer reactions. The problem of reaching such small segments of the market for research purposes can be solved by abandoning the traditional sampling methods and using instead the flow of distribution. This is done by sampling products instead of respondents and letting the products localise the consumers. The method is to select a systematic random sample of products before they are distributed and attach questionnaires to the products. The questionnaires are to be answered by the consumers and sent to the research institute. We call this type of research: product-sampling or distribution-radar.
We are accustomed to think of a newspaper as a medium of advertising. We sometimes forget that a daily newspaper is a commodity in itself and as one of the most perishable of consumer goods it presents some very special problems. It is manufactured during the night and is on sale for a part of the following day. After this time it is of very little value to the consumer. Like most products it has regular and occasional buyers. It is distributed nationally though 1 ,200 wholesalers and 40,000 retailers, and is promoted and advertised in much the same way as other goods. Demand is seasonal, with sudden bursts whenever major news events occur. Decisions on volume of production and distribution have to be taken every night. A newspaper with an expansionist policy must of course provide opportunities for chance purchasers and must incur the costs of over production. Even with a static circulation policy the fluctuation in demand for the newspaper would lead to the imperfect matching of supply and demand.