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Question

Driza-Bone believes in making timeless, functional and comfortable clothing that is designed to not only look good but have a comfortable fit and be made to endure. Their story began on a ship in the 1890s when British sailor Emilius Le Roy conjured the image of an indestructible wet-weather jacket made from recycled ship sails that were treated with oil. From here, the oilskin legend was born and would later become the famous wet-weather coat and an Australian workwear staple.

Today the range covers outerwear and apparel for all conditions, inside and out, constructed for durability, comfort and protection. And as a 100% Australian owned company they are proud to still be protecting Australians 118 years on.

Driza-Bone intends to stretch their brand in Australia. You have been hired by them as a consultant to advise about the following aspects of the Marketing Channel design for their new range of clothing accessories:

1.Specification of the main distribution tasks

2.Development of possible alternative channel structures

3.Evaluation of the variables affecting channel structure, i.e. market, product, company,

intermediary, environmental and behavioural variables

1.Selection of the optimum channel structure and justification for the same

2.Criteria used to find and select prospective channel members

3.Product differentiation and channel management

4.Product positioning, brand strategy and channel management

You are required to address the above seven aspects of the Marketing Channel design.
 

Answer
Alternative Channel Structures

The development of possible alternative channel structures has been selected for Driza-Bone in order to stretch its brand through offering clothing accessories in Australia. The possibilities on three dimensions such as number of levels, intensity along with type of intermediaries will be evaluated. Considering all the channel alternatives based on number of levels, type of intermediaries and intensity it can be considered important for ensuring product success.

First Issue
  • Number of Levels:Moreover, the number of levels within the business channel can range from the direct ones that include manufacturers to users and can even go up to five levels.
  • Intensity:Intensity at various channel levels for Driza-Bone can be segmented into intensive, selective as well as exclusive. Such channel for this women range raincoats can be intensive that can consider including effectiveness-based technologies along with well-designed websites that will not require performing necessary distribution tasks such as picking, packing, stocking and tracking a huge number of orders on everyday basis.
  • Type of Intermediaries:In increasing its brand reach in the market, the brand must consider implementing electronic and online auction as a type of intermediary that can offer a wide range of outlets for its consumers (Chryssochoidis 2015). Based on the fact the company is recommended to follow a 2 level direct structure that will be carried out on the online medium.
Second Issue-
  • Number of Levels:The brand can also consider developing a number of “state-of-art warehouses” along with hiring a number of people to carry out the simple distribution tasks (Gupta and Gentry 2018).
  • Intensity:On the other hand, as mentioned in the type of intermediary that can be selected by Driza-Bone brand is online auction strategy. Selling or distributing goods through online auctions can facilitate the company in eliminating the presence of older product models and dated styles (Lancaster and Massingham 2017).
  • Type of Intermediaries:The items distribution strategies explained above can be used by Driza-Bone in selling their products in as many outlets as possible. This distribution channel structure can be used by the brand for the reason that it can facilitation offering certain convenience products of the band such as a wide range of women range raincoats (Ko, Ko and Chun 2017).The recommendation is to implement a three level structure and the third a four level structure – manufacturer – wholesaler – agent – retailer. 
 
Third Issue
  • Number of Levels:The warehouse distributors can also be employed by the brand that will have all the capability to perform the distribution tasks that can be attained by producers.
  • Intensity:Extensive intensity is used in which there will be a selective distribution pattern. Just one intermediary will be selected in this intensity selection as it might apply to all the retail intermediaries of Driza-Bone.
  • Type of Intermediaries:The web also can offer the brand will the opportunity to develop the company’s regional or domestic consumers for all its offered women range raincoats all through Australia and as the company can ship its offerings it can also sell it though auction.
Fourth Issue
  • Number of Levels:Speciality goods is possible to e offered by the company and use of intensive level can be used as it can serve as a major factor in reflecting a company’s overall strategies and corporate objectives.
  • Intensity:Intensive distribution channel can be used in this brand and many consumer convenience goods and industrial opeaing supplies fit this organization.
  • Type of Intermediaries:The distribution channel that will be used is very high selected distribution pattern.
Selection of Optimal Channel Structures

Selection of the optimum capital structure is considered by Driza-Bone and the justification for such selection will also be considered in facilitating the company to expand its brand all over Australia (Moreno-Gavara and Jiménez-Zarco 2016).

 

Figure 1: Distribution Channel Structure of Raincoats

(Source: Authors Creation)

The financial cost management for the selected distribution for the brand has been indicated below:

Driza-Bone brand

 Tradeshow Budget

 Tradeshow Name

Tradeshow Dates

 Tradeshow City

 

 

 

 

 

 

 

 

 

 This Year's

 This Year's

 

 

 

 This Show

 

 This Show

 

 Budget As

 Actual As

 Average

 

 

 This Year

 

 Last Year

 

 % of Total

 % of Total

 Cost %

 Item

 

 Budget

 Actual

 Difference

 Difference %

 

 Actual

 

 Cost

 Cost

 Benchmark

 

 

 

 

 

 

 

 

 

 

 

 

 SPACE RENTAL:

 

 

 

 

 

 

 

 

 

 

 

 Distribution intermediary

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

 Online auction

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Meeting Rooms

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Other

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

         Subtotal

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

 

 

 

 

 

 

 

 

 

 

 

 

 EXHIBIT DESIGN:

 

 

 

 

 

 

 

 

 

 

 

    Design

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Construction

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Refurbishing

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Graphics

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Packing  

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Storage

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Insurance

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Display Materials

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Installation & Dismantle

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Insurance

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Tool Box Supplies

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Other

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

         Subtotal

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

 

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

 TRANSPORTATION (to & from):

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Freight

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Drayage

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Customs & Brokerage

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Other

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

         Subtotal

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

 

 

 

 

 

 

 

 

 

 

 

 

 SHOW SERVICES:

 

 

 

 

 

 

 

 

 

 

 

    Electrical

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Plumbing

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Janitorial

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Security

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Audiovisual

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Internet  

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Equipment Rental

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Furniture Rental

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Carpet

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Riggers

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Exhibitor Badges/Registration

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Florist/Plant Rental

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Catering

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Photography

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Other

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

         Subtotal

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

 

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

 TRAVEL & ENTERTAINMENT:

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Staff Salaries

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Temporary Staff

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Staff Transportation

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Meals & Entertainment

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Lodging/Accomodations

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Staff Attire

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Other

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

         Subtotal

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

 

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

 ADVERTISING & PROMOTION:

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Print Advertising

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Customer Hospitality

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Sponsorships

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Guest Passes

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Press Conference

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Press Kits

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Radio & TV

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Collateral Material

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Direct Mail

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Mailing List Rental

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Catalogues/Guides

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

    Promotional Products

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

    Agency Fee

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Internet

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Other

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

         Subtotal

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

 

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

 OTHER:

 

 

 

 

 

 

 

 

 

 

 

    Exhibit Staff Training

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Other

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

         Subtotal

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

 

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

 

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

 LEAD GATHERING/FULFILLMENT:

 

 

 

 

 

 

 

 

 

 

    Lead Form Printing

 

 $   10,000.00

 $       9,000.00

 $       1,000.00

10.0%

 

 $  1,00,000.00

 

34.8%

35.1%

 

    Lead Capture Rental

 

       9,000.00

          7,500.00

         1,500.00

16.7%

 

    2,00,000.00

 

31.4%

29.2%

 

    Lead Follow-up Costs

 

       8,500.00

          8,000.00

 $         500.00

5.9%

 

 $  3,00,000.00

 

29.6%

31.2%

 

    Other

 

       1,200.00

          1,150.00

              50.00

4.2%

 

    4,00,000.00

 

4.2%

4.5%

 

         Subtotal

 

     28,700.00

        25,650.00

         3,050.00

10.6%

 

   10,00,000.00

 

100.0%

100.0%

39%

 

 

 

 

 

 

 

 

 

 

 

 

      TOTAL

 

 $   28,700.00

 $     25,650.00

 $       3,050.00

10.6%

 

 $10,00,000.00

 

100.0%

100.0%

100%


Financial Cost Management Table

Quantitauve analysis is conducted through using financial cost management for the company that will include the budget for implementing the selected channel. For better distribution certain expenses have been beard by the company in its space rental, exhibit design, transportation, show services, travel and entertainment, lead gathering and advertising and promotion. This budget is deemed to be justified in considering the fact that the expenses experienced by the company in implementation of this budget are less than the revenue attained. Moreover, the budget that is prepared will facilitate in cost control that did not lead to cost overruns within the company. The budget that is set in the table above as the prospective distribution channel for the women range raincoats brand for the reason that annual inventions can be held by its wholesale and retail trade associations. Driza-Bone has a sound financial position and is observed to have a sustainable market position through being an icon among the fashion brands that is deemed to support its new product development strategy.

Criteria for Recognizing Prospective Channel Members

There are certain criteria’s that can be observed to be useful in choosing the prospective channel members. These criteria based on which the effectiveness of the distribution channels that be used by the company includes market, product, company, intermediary, behavioral and environmental variables (Ngendakuriyo and Taboubi 2017). These criteria’s can be considered by Driza-Bone in identifying suitable channel members for the brand. For this clothing accessories brand, the channel embers of the company are indicated below:

  • Are the distributors salespeople trained? -Salesperson for this woman range raincoats brand can be appointed is that they are best positioned to know about their potential distribution channel intermediaries (Robinson and Hsieh 2016). The saleswomen will be trained on marketing the product features and benefits through making them aware of the product details and through making them use product based data for ongoing development.
  • Does the distributor believe in active cooperation, sales training and sales promotion? -Trade associations along with publications such as Industrial Distribution magazine along with the verified directories of manufacturer’s representative. Direct inquiries from the intermediaries interested in order to handle their product are also considered to be the perspective channel members of the clothing accessories brand. Trade magazine and social media advertising can also act as prospective channel members as this can facilitate in increasing reach of the clothing brand’s products along a wide range of audiences. Certain effective sales promotion tactics will be used by the company in promoting its raincoats that includes promoting products through Twitter, networking and other social media websites.
  • To what important consumers does the distributors sell-Consumers are also considered to be the perspective channel members for the women range raincoats brand as they are readily willing to offer detailed opinions regarding intermediaries those call on them(Sa Vinhas and Heide 2014). The target market of the organization will be the consumers those prefer purchasing fashionable raincoats and belongs to the age group of 18 to 40 years.
  • What are the facilities that the distributors have for sales activities? -Banks, local real estate dealers, independent consultations, internet, business databases along with direct mail solicitations can serve as the prospective channel members of the clothing brand. In order to launch the raincoat. Certain facilities those are needed by the organization in successful launch of raincoat products includes setting a location, advertising channels and website developing site.
References

Chryssochoidis, G.M., 2015. Product/Market Portfolio, Extent of Access to Distribution Channels and Branding in Export Success Factors Research an Exploratory Study. In Proceedings of the 1993 World Marketing Congress (pp. 218-222). Springer, Cham.

Gupta, S. and Gentry, J.W., 2018. Evaluating fast fashion: examining its micro and the macro perspective. In Eco-Friendly and Fair (pp. 33-42). Routledge.

Ko, J., Ko, E. and Chun, E., 2017. Channel attributes of traditional market-based fashion brands and consumers’ multi-channel shopping orientation. Journal of Global Fashion Marketing8(2), pp.125-142.

Lancaster, G. and Massingham, L., 2017. Channels of distribution and logistics. In Essentials of Marketing Management (pp. 162-198). Routledge.

Moreno-Gavara, C. and Jiménez-Zarco, A.I., 2016. Online Distribution Channels for Global Luxury Brands: A Comparative between USA and China. In Encyclopedia of E-Commerce Development, Implementation, and Management(pp. 966-980). IGI Global.

Ngendakuriyo, F. and Taboubi, S., 2017. Pricing Strategies of Complementary Products in Distribution Channels: A Dynamic Approach. Dynamic Games and Applications7(1), pp.48-66.

Robinson, P.K. and Hsieh, L., 2016. Reshoring: a strategic renewal of luxury clothing supply chains. Operations Management Research9(3-4), pp.89-101.

Sa Vinhas, A. and Heide, J.B., 2014. Forms of competition and outcomes in dual distribution channels: The distributor’s perspective. Marketing Science34(1), pp.160-175.

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