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Distribution Strategy Essay

878 words - 4 pages

IntroductionThe core of this presentation is to discuss the theory of distribution strategy with the underlying real life examples of McDonald's fast-food restaurants in Australia. In other words, the aim is to discuss McDonald's distribution channel, the way this fast-food restaurant gets its products to the market. Nonetheless, this presentation will demonstrate that McDonald's distribution strategy is effective in many cultures. In the theory of marketing mix, place (distribution) determines where the product will be sold and how it will get there. In fact, McDonald's is the leading global foodservice retailer, with more than 30,000 local restaurants serving nearly 46 million people each day in 121 different countries. Approximately 80 percent of all McDonald's restaurants worldwide are owned and operated by independent franchisors. Furthermore, at the essence of place decisions, Kotler (et al., 2001, p. 513) claims that, "retailers, particularly image fast foods chains often state their seven P's of marketing to be, that is location, location, location, location, location, location and location." Hence, a retailer's location is the key to attracting customers. The costs of the building or leasing facilities is a major factor on the retailer's profits. Thus, site location decisions are among the most important the retailer make (Kotler, et al., 2001, p. 513).Intensive DistributionOn the other hand, McDonald's opened its first restaurant in Australia in December 1971. Today there are more than 690 restaurants throughout Australia and serving in excess of one million customers per day and employing over 55,000 staff. Therefore, you can find them everywhere in Australia, where some of the McDonald's are open 24 hours per day which satisfy people's needs and wants, especially for exists their hunger. This kind of distribution strategy is called "intensive distribution", means marking the product available for sale through all possible channels of distribution. As defined by Kotler (et al., 2001, p. 487), "intensive distribution is stocking the product in as many outlets as possible." In addition, this strategy must be designed to reach the consumer wants at anytime and anywhere.Vertical marketing network (VMN)Furthermore, to quote Kotler (et al., 2001, p. 482), a franchise organization is "a contractual vertical marketing network in which a channel member called a franchisor links several stages in production-distribution process". McDonald's has adopted the service-firm-sponsored retailer franchise network, in which a service firm licenses a network of retailers to bring its service to consumers (Kotler, et al., 2001, p. 482). Nevertheless, McDonald's caters to a large consumer market with varying tastes and thus cannot afford to introduce products without familiarizing itself with provincial preferences in food. For this reason, McDonald's distributes its products in foreign locations with the help of franchisors who are well aware of what...

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