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Article #297: Non of Product Exists In This World

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"Both the market and the distributive But sooner than never, this distributive
channel are often more crucial than the channel recognized their power. They are
product. Products are within the business lot efficient than the product brand
as the accountants define it. They are owner. They know their customer much
within its legal boundaries. Economically better than brand owners. So they can
the other two areas are as much part of mould their strategy in a very swift
business." - Peter Drucker, Managing for speed.
Results. Apart from that manufacturer use to made
According to Peter Drucker product their product for in east in China,
actually does not exist at all, Indonesia etc. This global supply chain
economically speaking, except within a has shown a remarkable efficiency in last
market, bought by a customer for an decade of 20th century. All the best
end-use, and brought to him through a brands on 20th century use to get their
distributive channel. Markets as well as product manufacturer in low labour
distributive channel do exist, however, countries. Now distributive channel want
independently of any one product. They to replace brand owner to dominate the
are primary, the product is secondary. supply chain. According to data from
Product management is a sub - section of market, 80-90% of American consumers buy
a management. But market and distributive from Wal-Mart, target etc. 50% of all
channel exists outside of management sale of brand number one and two are
control. They are the most crucial and recorded by these biggies channels.
along with that most difficult part of These biggies have now started copying
business to understand and dominate. these manufacturer products. Given the
A product needs to find its niche market. advantage of 10-15% saving in
And to reach this niche market, it needs advertising, 5% in sales force and 5% in
a niche distributive channel. The whole R&D, these distributive channels are
supply chain should be friction free for cutting the brand owner throat by
smooth functioning of product reducing the prices at rock bottom.
profitability. According to Nirmalya Wal-Mart knows how to discount lowest and
Kumar, marketing consultant, brand owner still be profitable to thwart any
of yesterday world are still thinking competition. Marketers at these
themselves an emperor. But in reality distributive channels know very well that
they are barely standing in nude. brands are passé. Only customer
Distributive channels, wal-Mart, Tesco, experience and access to the product
Aldi etc, has found their place in the matters, as Jagdish Seth's 4 A's defines.
sun. Products brand owners need to understand
Market logic is very simple. These the fact. It is market and distributive
retailers use to act as a link between channels century. And they must learn to
customer and the product manufacturer. live with the tigers.






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