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Principles of Logistics and Marketing: The Marketing Mix
Discuss why Place, or Distribution, can become the element of the marketing mix that causes the biggest headache to the manufacturer.
Looking back over the two journals, I can see that the distribution channels for both companies are tailored very well around what the company actually needs them for.
In the case of Dell computers, the direct structure they are using at present seems to have unrivaled effects for their competitors. If they were to use an indirect approach to distribution, as in, selling some of their stock to Currys or Dixons then I believe the market would fail. There brand name would start to look like all the other high street brands and customer would not feel as exclusive as they use to. It seems too costly to have another chain in the system. By using a direct approach, Dell stays fully in control of their movements and their profits. In other words, they don't have to send computers to retail stores where rental costs and cut throat competition would be greeting them. James Dells vision to have no inventory, a reduced cost structure, reduced taxes and better looking financial statements due to no excess stock, has been achieved. Dell is also developing distribution channels in the Middle East in the same way they have been using them in Europe and the West. It is not guaranteed the Middle East will adapt to this way of selling and purchasing, although, with the brand image, power and success of Dell internationally, I feel they will be successful.1
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