Essay about Marketing Strategy : Distribution Channel
The third major marketing mix tool is distribution. The distribution channel is “path through which goods and services travel from the vendor to the consumer or payments for those products travel from the consumer to the vendor” (Investopedia.com, n.d., para.1). Thus, the distribution channel can work in multiple ways, it can work as direct transaction from the vendor to the consumer or it may include several interconnected intermediaries along the way, which can include wholesalers, distributors, agents and retailers. These intermediaries receive the product or service at one pricing point and continually move to the next pricing point, until it reaches the final buyer.
Providing home-monitoring services to consumers who have vehicles with OnStar capability is important to the company. However, to offer this service to customers, OnStar will partner with vendors that include General Motors (GM), Buick, and Chevrolet. These vendors will assist OnStar with getting the home-monitoring services to the customer at the right place and time (Southern New Hampshire University – Week Seven Overview, 2015), specifically when the customer purchases a vehicle from one of the vendors. Therefore, these vendors will also help OnStar achieve high customer satisfaction, by fulfilling the customers’ specific need at the correct time (Southern New Hampshire University – Week Seven Overview, 2015).
According to Armstrong and Kotler (2015), “channel members…