Distributive Network Changes and Maintaining Relations

The evolution of new types of distributive outlets has been a recurring phenomenon. Over the years, many new marketing institutions have appeared and grown in importance—online retailers, department stores, corporate chains, cooperative and voluntary chains, producers’ and con­sumers’ cooperatives, supermarkets, and discount department stores, to name but a few. Older, better established types of distributive outlets proclaim loudly that each new institution is “illegitimate.” They plead with manufacturers for protection against such unfair and unorthodox compet­itors. Consequently, the newborn institutions fight all the harder to make sales and even to secure sources of supply—perhaps that is why new institutional forms seem more virile than older ones. Whenever new types of distributive institutions have been successful, they have filled a market niche that went unfilled up to the time of their appearance. Manufacturers who do not allow their marketing channels to “freeze,” those with truly dynamic marketing and sales policies, have less difficulty in maintaining adequate overall distribution. It may be appropriate occasionally for a manufacturer to assist its conventional outlets in coping with their new competitors, but the manufacturer must also ensure that its products are represented in the new outlets. Marketing history is full of instances of manufacturers who have clung too long to losing causes. The best policy is neither to assist nor to throw roadblocks in the way of the newer institu­tions. If research of broad underlying economic, political, and social trends indicates that newer types of outlets are capable of becoming important outlets for the product, changes in marketing channels and sales policies should be considered.

Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.

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