Abstract
The management of manufacturing companies faces a number of decisions, and one of the most important is the selection of distribution channels. A large number of these companies do not sell their products directly to end consumers. For this reason, there are marketing intermediaries between manufacturers and end consumers whose primary function is to connect manufacturers and consumers. Their task is to provide the goods from manufacturers to consumers with the satisfaction of logistics characteristics: at the right time, at the right place and in a form that is convenient to use, and certainly with minimal costs. Distribution is one of four marketing mix instruments without which the optimal combination of the instruments would not be obtained. Thus, the decision on selecting distribution channels is as important as the decisions regarding products, prices and promotion. Based on the set criteria and the evaluation of certain distribution channels by the criteria, the management of the company will be able to make the best decision. The evaluation of distribution channels based on the set criteria was performed by marketing experts and experts in certain markets using an integrated multi-criteria model. The FUCOM method was applied to determine the significance of the criteria, and then the distribution channels were evaluated by applying the new MARCOS method. Thereafter, a sensitivity analysis was performed using other MCDM methods to verify the results previously obtained.
Highlights
All four instruments have to be considered when deciding on the optimal combination of marketing instruments, i.e., the marketing mix
Case study This paper considers making the best decision on selecting a distribution channel for a particular company
The fourth and fifth decision-makers, as well as the first and second decision-makers, considered that the most significant criterion for selecting a distribution channel was the financial situation of the company, but the fifth decision-maker indicated that the costs were as significant as the financial situation of the company
Summary
All four instruments have to be considered when deciding on the optimal combination of marketing instruments, i.e., the marketing mix. Distribution channels are an instrument of the marketing mix that serves manufacturers as a connection with consumers. The possibility depends on a number of factors, such as product characteristics, consumer habits, costs generated by direct sales, geographic distribution of consumers, i.e., market size, etc. For this reason, manufacturers have several types of distribution channels at their disposal. There are two main groups of distribution channels, i.e., intermediaries that are involved in delivering goods from manufacturers to consumers. The ancillary entities do not take ownership of the goods nor negotiate with consumers the terms of sale and purchase, but only help to complete the distribution process in the right way and without interruption. The ancillary entities are transport companies, freight forwarders, insurance companies, warehouses, banks and other entities that participate in ancillary activities in the distribution of products
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