-
Essay / What is a distribution channel? - 722
A distribution channel is made up of organizations brought together in the process of making products available to consumers. An effective distribution channel can help improve company sales while reducing costs. An ineffective distribution strategy can cost a business a lot of money and can even lead to financial problems. This article will examine Colgate-Palmolive's logistics, production, and shipping strategies. This paper will also discuss the marketing channels and areas where the Colgate Company can improve. Logistics, Production and Shipping Having an effective logistics, production and shipping strategy can give businesses an edge over their competitors. Producing and getting products to customers can be expensive. Having an effective strategy can help reduce costs and increase profits. Colgate works closely with its suppliers to improve quality, profitability and innovation. The company only chooses to work with suppliers who share the same values as the Colgate-Palmolive company (Colgate, 2011). Over the years, Colgate-Palmolive had to examine how many factories the company owned and where those factories were located. located. The company sells products in more than two hundred countries and has factories located in different regions of the world. Since 2004, Colgate has reduced the number of factories it operated worldwide (Colgate, 2011). The company began using contract manufacturing rather than doing its own manufacturing (Trunick, 2011). By making these changes, the company was able to better control costs and become more profitable. Products must find their way from manufacturing plants to customers. Colgate uses multiple shipping containers, truck shipments, and smaller truck shipments (Trunick, 2011). Shipping costs can be very expensive. With the closure of some factories, the kilometers traveled between the factory and the customer have increased. Rising gas prices as well as additional miles have led to increased costs (Trunick, 2011). Marketing Channels According to Berry (2010), “in its most simplistic form, a marketing channel does the work of moving goods from producers to consumers.” According to Quelch and Laidler (2011) “In 1987, traditional grocery stores sold 75% of oral care products, but by 1992 they accounted for only 43% of toothbrush sales and 47% of sales toothpaste. » Colgate's distribution strategy is through major retail stores, grocery stores, pharmacies, dentists and plastic surgeons. Colgate has been very successful in positioning its products in stores where they would attract customers' attention (Khurana, 2010).