Hybrid Distribution Strategy
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Introduction: Hybrid Distribution Strategy is defined as a system, which enables a company to avoid chaos and increase their efficiency in context to productivity and profitability. A company is benefitted in several ways if they follow this strategy. In the following study hybrid distribution strategy is going to be discussed in a broad manner. In addition, what are the various advantages and disadvantages faced by the company following this strategy is also going to be examined.
Question 1: Describe hybrid channels or "hybrid distribution strategy" used by firms these days.
Answer: Hybrid distribution system can be defined as "multi channel marketing". It is as such that different consumers buy the same product from different channels. The company mainly adopts hybrid distribution strategy because it lets them to understand the changing behaviour of the customers in terms of their needs and requirements with the changing time. For instance in earlier days people used to do shopping by physically visiting the market whereas now a day along with the advancement of technology people prefers online marketing. Henceforth, this strategy helps the company to understand the change in behaviour of the shopping pattern of the consumers. Secondly, in the viewpoint of the companies, it allows them to display their various types of products of different brands in large scale through online shopping sites. Moreover, those companies which are having larger manufacturing capacity gets benefitted because this provides them additional outlets irrespective of the existing outlets which may or may not have saturated. Thereby, it is helping the company to retain their position in the competitive market. However, this hybrid channel has both positive as well as negative impact on a company, yet it is recommendable (Johansson & Kask, 2017).
Sometimes developing hybrid channel is related to finding out more convenient and easier ways of delivering a product or service of the company to the consumers so that they are able to gain the trust and faith of the consumers on them. In this way, it helps them to retain their customers forever. There are some main reasons due to which hybrid distributional systems must be implemented. Firstly, there are some segments of the markets, which are not readily available to the common distributors. However, with the introduction of hybrid channels such as Telemarketing, direct mail system and others let the consumers to avail these segments readily. Furthermore, Hybrid channels are mostly developed keeping in mind to increase the profitability range of the companies by providing different routes to reach the attention of the audiences (Stojkovic, Lovreta, & Bogetic, 2016).
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Internet is being used as the most primary resource for developing this hybrid channels. Companies use this platform for advertising their products on social networking sites thereby creating awareness about the launching of new products among the people. This lets them to attract new customers to their products and thereby increasing their productivity and brand name in the market. Therefore, hybrid distribution system is an important utility for a company to create its brand image and market value in the social market.
Question 2: Examine the benefits and challenges faced by firms that use the "hybrid distribution strategy". (350)
Answer: In the modern era, along with the advancement of technologies, the consumers have become aware of the technologies and therefore, it is being difficult for the companies to target customers only through one channel that it via retailing. The modern generation focuses more on buying products through multi channel network rather physically visiting to the retailing shops and buying products. Due to the hybrid distribution system the companies can expect to have a greater amount of sale rather those companies, which still follows traditional methods of targeting customers only through single channels. In the consumers' viewpoint, this strategy is beneficial for them as they get a variety of choice preference with respect to a particular product (Jeanpert & Paché, 2016). They are able to compare the price of the same product in various online shopping portals like Amazon, Myntra, Ebay and others. In addition, the best part of hybrid distribution system is that it enhances the market potential largely. As such, a person owning a single shop might develop an online website displaying all his products and stores, which can be accessible from any part of the world. Therefore, people can buy items from his online stores and therefore it will boost up his market potential (2019).
Another great advantage of hybrid distribution system is sustainability. By following the paths of larger brands, the smaller brands learn about how to become sustainable in the market by following multiple marketing channels. However, along with these advantages Hybrid distribution system faces lots of challenges. Firstly, developing a hybrid channel requires a huge budget. As a result, it becomes easier for the larger brands to establish hybrid channels much easily than that of those smaller brands. Therefore, the smaller brand is suppressed by the larger brands before they could rise. In addition, as it involves a huge financial investment therefore it requires a solid planning. It is because if the plan fails the company might have to incur a massive loss (Chiou, Chou & Shen, 2017). Therefore, any company before introducing hybrid distribution system must design a proper plan based on past records and statistical reports of other companies in context to profitability.
Conclusion: It can be concluded that hybrid distribution system is mainly advantageous for the companies, which have larger brands rather than the smaller brands. However, the smaller brands can learn from these larger brands about how to manage hybrid distribution system to sustain in the competitive market. In addition, in context to the larger brands, they must develop proper plans because keeping pace with the modern era is quite difficult in order to understand their choices and needs otherwise the company might have to face great losses.
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