In this article we describe the Distribution Analysis, often used in order to map out the external environment of a business.
Summary of Distribution Analysis
Distribution Analysis is used in order to map out the external environment of a business. It is a component of Situational Analysis, CICD Analysis and External Analysis. The output from the Distribution Analysis serves as input for SWOT Analysis. Conducting a Distribution Analysis enables a business to respond to the opportunities and threats that the distribution entails.
What is de distribution analysis?
Distribution has an increasingly greater influence on the strategy for companies and is therefore an important element of the marketing plan for some companies. What kind of influence does the distribution play on the company? Distribution Analysis is a component of the Situation Analysis and is used in order to map out the external environment of a business. The opportunities and threats that emerge therefrom serve as input for the SWOT upon which the ultimate choice of strategy is based.
Why the Distribution Analysis?
Conducting a Distribution Analysis creates insight into a business’s distribution and the opportunities and threats that this aspect of the external environment entails. This enables a business to attune its strategy and thereby to effectively respond to its environment. It must be said that the Distribution Analysis is not relevant for every company. Should this be the case, it does not need to be taken up in the marketing plan.
What does Distribution Analysis consist of?
In the book ‘Marketingstrategie’ (Marketing Strategy) by Ruud T Frambach, Prof. dr. R.T. Frambach, Prof. dr. E.J. Nijssen, Ed J Nijssen there are four important areas of research that need to be analysed.
- Manner of Distribution
- Distribution Function
- Distribution Forms and Distributive Position
- Concentration of Distribution
1. Manner of Distribution
How does the product arrive at the customer and what changes will begin to appear therein in the future? What do the customers want? Does it contribute to the profitability? Does it contribute to the logistical efficiency? Is it distinguishable from the competitors? What is the influence of relations and power on the distribution?
2. Distribution Function
Physical distribution vs. Marketing function. Physical: Value creation by technological advance (ICT) by which a better physical distribution for customers can come to stand. Marketing: Enable resellers to “better” sell the product. Where does the room to create value for the customer lie? Give an answer on this question in this element.
3. Distribution Forms and Distributive Position
What forms of distribution are there and how to perform them? Make use of key distribution figures and compare them to the market. Is there room for improvement?
4. Concentration of Distribution
What are the power relations and what kind of changes occur there? Which changes are these prone to?
Conducting the Distribution Analysis
After researching the abovementioned four areas, a general picture of the distribution is presented and important opportunities and threats come to surface. Include these opportunities and threats in the SWOT.
Marketing Implications
The Distribution Analysis is a marketing tool with which research can easily be done on the way an organisation can effectively respond to its environment. It is up to the marketer to implement a good adjustment here. Findings from Distribution Analysis are often used as input for a SWOT Analysis and are a component of the Situation Analysis and the marketing plan.