Some manufacturers select the strategy of selling their products through both in

Question

Some manufacturers select the strategy of selling their products through both independent retailers that carry more than one brand of the same type of product while also selling their products through retail stores that they own and operate with their own employees. This is referred to as dual distribution.

Assume the following scenario:

You are interested in purchasing a new type of electronics product that is distributed through dual distribution with the nearest manufacturer-owned store located a few miles from your home. A store you are familiar with that carries that manufacturer’s brand plus three other brands of the product you are interested in is located about the same distance from your home, but in the opposite direction.

You are anxious to use the product while friends are visiting this evening, but will only have time to get to one of the stores before store closing time.

Explain which store you would drive to and why you selected that store.

Use your textbook, the Argosy University online library resources, and the Internet to research dual distribution and respond to the following:

Describe the likely reasons for manufacturers of electronic products to adopt dual distribution.

Describe the potential disadvantages that might materialize for manufacturers who adopt the dual distribution strategy.

Write your initial response in 3-5 paragraphs.

Explanation / Answer

I would like to drive to the store that carries that manufacturer's brand plus three other brands of the product.

The reason preferring the store other than the manufacturer' store is to enhance the probability of getting the product within the limited time available as there exists possibility of other brands of the product along with particular manufacturer. In case of manufacturer' store if the product is out of stocks, there is no alternative available.

The likely reasons for manufacturers of electronic products to adopt dual distribution are as follows:

1. Manufacturers can not open as many stores at as many locations that customers demands.

2. Customers prefer different brands of different electronic products may be at the same store.

3. Customers would like to go to manufacturer's store for assurance of quality and price and may be for brand loyalty.

4.At times customers like to have comparisons among brands so prefer stores having multiple brands rather than going to single manufacturer's store.

5. Demand of electric products varies from customer to customer with respect to preference to manufacturer's store vis a vis stores providing larger number of choices for same and or similiar products.

6. Main disadvantage to manufacturer following dual distribution is about the likely unfair practices followed by stores having multiple brands to push sales of products of the competitors (may be due to higher margins).

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