Distribution is among the 4ps of marketing represented by place. It is the process of making a good or service available for sale to a consumer or business through the use of direct or indirect means. Indirect distribution involves the use of intermediaries.
Distribution of goods takes place via channels. These are sets of interdependent intermediaries involved in making the good available for consumption to the end-user.
Merchant stores are intermediaries that buy and sell the products to the end user. Brokers and Agents are intermediaries that act on behalf of the manufacturer but do not take ownership of the products (Kotler &Keller, 2002).
Coca-Cola produces many products in liters per day/hour. This means that they need a very efficient, flawless distribution plan.
A business like Coca-Cola can design any number of distribution channels they require. Channels are normally classified by the number of intermediaries between the producer and consumer. A level zero channel has zero intermediaries.
This is typically direct marketing. A level one channel has an only one intermediary. The flow is typically from manufacturer to retailer and then to consumer.
Coca-Cola uses bottling companies as its distribution channels. These bottling companies then work with retailers who sell the product to the end user.
Coca-Cola manufactures and then sells concentrates, syrups, and beverage bases to the bottling companies.
These companies own the brands and are also responsible for brand marketing activities to the end users. They also manufacture, pack, merchandise and finally distribute the final branded products to the end consumers or their vending shops who also sell to the end consumer. This represents indirect marketing.
Under indirect marketing, a firm can either choose to do intensive, selective or exclusive distribution. Intensive distribution the products are stored in the majority of the outlets. It is common for basic supplies e.g. snack foods, soft drinks and print (magazines).
Selective distribution is where the producer relies on few middlemen to carry its product. It is observed in more specified products. They are carried through specialized dealers e.g. large appliances, craft tools e.t.C The dealers need to have a certain experience to be allowed to handle the product.
Exclusive distribution involves a limited number of intermediaries (Kotler & Keller, 2002). It is characterized by exclusive dealing, whereby the retailer only carries that producers goods only. It is normally used for luxury products e.g. Gucci.
Coca-Cola uses both intensive and selective distribution. The bottling companies need to know how to manufacture the syrup and concentrate on the final product without limiting the quality. From the bottling companies, intensive distribution is used to the retailers, supermarkets, shops, etc.
This allows for Coca-Cola products to reach as many consumers as possible with the highest quality achievement. Personally, I buy the product from a retailer who is at the bottom of the distribution chain. They get the products from their distribution partners.
The company (Coca Cola) has a bottling investment group called Bottling Investment group (BIG). Its core is production, marketing and selling the beverages to the world. Historically the company has relied on franchises that are independent.
This system has been working for them. BIG has also strategically invested in selected bottling operations and taking them under Coca-Cola ownership.
Through this strategy BIG can in the long-term grow in critical markets as per the strategy. This would then reduce the major investment or structural challenges.
Coca Cola website, Derived from http://www.coca-colacompany.com/our-company/the-coca-cola-system
Kotler, P., & Keller, K. L. (2002). Marketing Management, Pearson Education. Edition2008.
Pendergrast, M. (2013). For God, country, and Coca-Cola: The definitive history of the great American soft drink and the company that makes it. Basic Books.
Wright, E. J., & Haslam, R. A. (1999). Manual handling risks and controls in a soft drinks distribution centre. Applied Ergonomics, 30(4), 311-318.