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The distribution approach to marketing exchange such a great innovation to see the big picture of mutually perceived beneficial  exchange relationship

Recently, I’ve read an article called The Distribution Approach to Marketing Exchange written by Anthony Miyazaki who is a Brand Strategist I’ve acquired so much knowledge from. In his article, he thoroughly analyzed three elements that, according to him, are part of the Distribution approach. These three elements comprise information, innovation, and compensation. I will discuss each of those in further detail in the next section. They all play a pivotal role in creating value while emphasizing exchange, which is one of the critical components to any organization’s success. No matter which area of Marketing you work in, keep in mind that your overall goal is to facilitate a perceived mutually beneficial exchange relationship between you and your customers or between you and your distributor. In other terms, all parties involved must gain value from that exchange. When I mention parties, I refer to entities. We often consider the exchange between the seller and the buyer for simplicity. Still, the flow of information, innovation, and compensation also needs to be passed down between the manufacturer and the distributor, between the distributor and the retailer, between the wholesaler and the distributor, between the manufacturer and the retailer, and so on and so forth. In the next section, I will explain how the distribution approach to Marketing exchange applies in the real world by considering Clemence and Margaux: my own sunglasses/optical brand.


The first flow of the distribution approach is information. Indeed, an exchange can’t start without collecting information from both parties. Since I’m using my own sunglasses brand, I’m going to introduce both parties as being the retailer and the final consumer. The retailer’s goal is to sell the sunglasses. Thus, he will need to provide as much information as possible, such as their benefits, the brand’s unique story, their unique characteristics, such as their name, size, shape, colors, materials used such as metal and acetate, and so on. Yet, the retailer’s mission is not merely to sell my frames but also to get to know his customers so that he can build a trustworthy and durable relationship with them. In addition, it is critical for the retailer to find out about his customer’s needs, wants, and expectations in order to best solve their problems and efficiently serve them. The retailer is also willing to handle any complaints, suggestions, or recommendations in order to enhance the quality of the overall buying experience and/or improve the quality of the products. Therefore, if the retailer hears any recommendations for improvement, he will have to tell the distributor, who will have to tell the wholesaler, and so on and so forth. As a result, information is constantly exchanged from entity to entity to improve the experience of each party involved in the organization’s success. I’ve talked a lot about the retailer, but the customer also wishes to collect as much information as possible about the sunglasses he is about to buy. The more information he acquires, the more likely he will consider purchasing the product. At the very least, he will be aware of the brand and its product features. The more people are aware, the more it increases the likelihood of purchasing. The key is communication: such an essential tool without which nothing would be possible, regardless of the industry.


The second flow of the distribution approach is innovation, which consists of the complete product delivery. Thus, how were the frames delivered to the customer? How was the delivery method? Were the sunglasses nicely presented, and in which type of packaging? For instance, did he like the case? Did the customer like the jewelry that was offered to him? Did he receive a good service? Would he recommend the person who served him to family, colleagues, or friends? All these elements are critical to the overall experience of the buyer. Customers need to feel valued, important, unique and cared for. Therefore, the more innovative the retailer is in its selling experience, the more it will gain the confidence of its customers and gain a competitive advantage. Once again, communication is fundamental. Each customer is unique and each of them probably have a preference in terms of delivery, design, service or prestige. Thus, listening to its customers is paramount in order to serve them efficiently and effectively.

The last flow of the distribution approach is compensation, which consists of the part of the value exchange that goes back from the seller to the buyer. When we think about exchange, the first word that comes to our mind is money. Yet, compensation not only includes money, but it can also comprise stability, prestige, or word of mouth. For example, which type of feedback did the retailer receive from its customer once the transaction was done? If the customer was satisfied about his overall experience, this will doubtlessly positively increase the work of mouth of the retailer’s service quality and the store’s reputation. If a retailer has great word of mouth, we may increasingly consider working with him and selling him a lot of solar/optical frames, even if he would like to purchase them at a lower price. Our goal is the satisfaction of our customers. As you can see, compensation doesn’t necessarily mean money, and in many cases, money is not the first value that is taken into consideration.

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