DISTRIBUTION

 

Most producers do not sell their goods directly to the final users: between them stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel, which is also called distribution channel.

Some intermediaries such as wholesalers and retailers buy, take title to, and resell the merchandise, they are called merchants. Others, such s brokers, manufacturers' representatives, sales agents search for customer and may negotiate on the producer's behalf but do not take title to the good, they are called agents. Still others, such as transportation companies, independent houses, negotiate purchase and sales; they are called facilitators.

 

 

Channel Levels:

 

Level-1: It is the direct distribution channel, where in the producer/manufacturer sells the product directly to the end user without involving any intermediaries. A local pani-puri wala uses direct channel.

 

Level-2 : In this level, the producer reaches his customers through  retailers. So he will first deliver the goods to the retailer who will then sell it to the customer. 

 

Level-3 : There is an addition of one more intermediary, the wholesaler. Now the producer will reach his final consumers through wholesalers and retailers. Wholesaler takes order from the retailer and communicates the same to the producer. The dispatch of goods is then supplied to the retailer by the wholesaler, which then exchange hands with the final consumer. This enables wider reach for the producer.

 

Level-4 : The fourth channel has one more addition , the agent. In this channel wholesaler sell to small-scale wholesalers also called agents or jobbers, who in return sell to small retailers.

 

 

 

Red Bull follows a direct channel where they reach their customers ( end user as well as the restaurants, clubs, liquor store etc.) through the network of independent wholesalers.

Red Bull started by selling its products in small distribution outlets like bars and health clubs and concentrated their limited cash to promote its products in these outlets. After enough time had passed and a pull force from the consumers was generated, Red Bull had the power to persuade the retail distribution channel to put its products on the shelf. Red Bull thus used a pull method to get its products on the shelves whereas the industry was used to using a push method in order to achieve the same goal. This enabled Red Bull to catch the incumbents by surprise and gain market share in a market considered impossible to penetrate.

 

The retail channel is the contact-point of the product and the end-consumers. For energy drinks, retail outlets include bars and nigh clubs, supermarkets, convenience stores, health clubs, etc. Red Bull is available in all of these channels, and is considered the number one energy drink brand in all of them.

 

 Smart Transport: Red Bull Energy Drinks travel to their destination predominantly by train and ship. They only use trucks when it's absolutely necessary. Since their cans are compact in shape and light in weight, they are a more efficient transport packaging than PET or Glass Bottles.

 

Transportation to more than 165 countries around the world:-

As soon as the Red Bull cans have been filled, they're transported from Austria and Switzerland to more than 165 countries worldwide. The cans travel long distances, whenever possible by ship and rail. Transportation by truck is the last resort when there's no other means of delivery - it remains Red Bull's priority to allocate ever more transport to rail and shipping. 

Following is a newspaper article on the change in the channel by RED BULL.

"We know that trust forms the basis of any successful business relationship. We would never carelessly risk the trust you have shown us over the last few years, and it is therefore important for us to respond to the rumours which have been going round: Yes, we are changing our distribution model in Australia.

From 1st January 2009 Red Bull will handle its own distribution by selling direct and through a network of independent wholesalers. As part of this change we will also update the ordering process.

We will inform you about all details of this change during the coming weeks. We will be doing all we can to prevent supply bottlenecks and to make the changeover as smooth as possible for you, because this is the only way to ensure that Red Bull will remain one of Australia’s most popular energy drinks."