Place (Distribution) Strategy
Place (Distribution) Strategy
The selective distribution strategy will be the most effective distribution implementation for larges appliances since this is the most widely use distribution strategy use by other major competitors like Walmart, The Home Depot, and Sears Holdings (Journals). The selective distribution strategy takes into account many logistical factors that have a direct cost effect on the sale of large household appliances.
Some of the major expenses are the cost of warehouse personal as well as storage space, the cost assigned to store square footage space inside the store, technical support specialists, shipping and delivery cost from manufacturer and to consumers, and a service department in charge of home installations (Business And Economics).
The stores located near to new housing construction development will be the first line of stores chosen to offer sales of large household appliances. Historical sales of large home appliances are predominantly from new home purchasers. Other stores will be evaluated in the type consumers within their geographical location by considering factors such as population demographics, family size, household income level, and percentage of homeownerships in a given location. All these factors will be carefully analyze in order to maximize profits and reduced risk (Journals). Target stores that meet the above criteria will be the ones equipped to sale large household appliances.
Place (Distribution) Strategy Amazon will primarily use a direct distribution channel to make the Amazon Bear available to customers. The bear will be sold directly to the consumer instead of using traditional layered distribution systems that uses wholesalers to sell to retailers. This distribution method will generate higher profit margins because Amazon will not need to share the profits with intermediaries. Additionally, distribution via internet is convenient for customers because the product will be available 24 hours a day. Direct selling will also help Amazon develop a stronger customer relationship. Customers will provide accurate and instant feedback about their satisfaction or dissatisfaction with the product. Customer feedback will be instrumental in continuous product improvement as well as new product development. The selective distribution strategy will also be an effective way to increase market coverage while still controlling and reducing costs. Since the Amazon Bear is an educational and an interactive toy, Amazon will distribute the bear to Build-A-Bear Workshop brick and mortar stores. Build-A-Bear operates the only stores which have a teddy bear themed environment. Build-A-Bear targets young children who come to the store to make their own personalized and customized stuffed animal (Build-A-Bear Workshop, 2013). By purchasing the Amazon Bear through Build-A-Bear, children will be able to customize their new friend who will talk and interact with them during long trips, bedtime, and while their working parents are away from home. Amazon and Build-A Bear will both benefit from this cross promotional venture. Amazon's benefit will be from having a location where people can touch, and see the bear in person in many more locations that what amazon has now. Build-A-Bear Workshop will also benefit from increased sales due to having a computerized bear instead of just a traditional stuffed animal. According to Industry estimates, the retail toys sales in the United States have decreased due to the growing popularity of mobile devices used by children (Build-A-Bear Workshop, 2013). The bear will also be distributed to selective toy stores like Toys R Us, Target, and Wal-Mart.