Marketing Channel Design for Koala Mattress: A Consultancy Report

This report provides a comprehensive analysis of Koala Mattress's marketing channel design, focusing on its current strategies and potential improvements. It begins with an executive summary and an introduction to marketing channels, followed by a Porter's Five Forces analysis of the Australian retail industry. The report then examines Koala Mattress's business, including its product positioning, brand strategy, and channel management. It details the development of alternative channel structures, including wholesaler, direct, and retail channels, with diagrams illustrating each. The advantages and disadvantages of each channel structure are discussed, and the report recommends potential channel members such as suppliers, financial support providers, and promotional partners. Furthermore, the report includes recommendations for Koala Mattress, such as developing physical stores and enhancing sustainable resource use. The report is concluded by summarizing the key findings and emphasizing the importance of online stores for expanding Koala Mattress's customer base. References support the analysis and recommendations.

Running head: MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Name of the Student
Name of the University
Author Note

1MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Executive Summary
The report is based on the analysis of an organization named Koala Mattress that functions in
Australian retail market. The channel of distribution and sales that has been developed by
Koala Mattress has been discussed in the report in detail. The retail industry of Australia and
different forces that are a part of the industry have also been analysed. The report has
provided a detailed picture of the brand strategy, positioning strategy and channel
management process of the organization. Recommendations have also been provided about
the ways by which Koala Mattress can implement different other channels in order to reach
the customers.

2MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Table of Contents
Introduction....................................................................................................................3
Porter’s five forces analysis of Australian retail industry..............................................3
About Koala Mattresses.................................................................................................4
Development of the alternative channel structures for Koala Mattresses......................4
Selection of possible channel members for Koala Mattresses.......................................6
Product positioning, brand strategy and channel management of Koala Mattresses.....7
Recommendations..........................................................................................................7
Conclusion......................................................................................................................8
References......................................................................................................................9

3MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Introduction
Marketing channel can be defined as the organizations, people and the activities that
are necessary for transferring ownership of the goods from the production to consumption
point of view. The channels help organizations so that their products can reach the consumers
and end-users. The marketing channel is considered to be a useful tool related to proper
management and is considered to be crucial for the proper development of a well-planned
strategy of marketing (Bailey 2019). The report will be based on the analysis of the marketing
channels that are used by Koala Mattress currently and the future changes that can be
implemented in the channels as well.
Porter’s five forces analysis of Australian retail industry
The Porter’s five forces framework can be used for analysing the Australian retail
industry in the following manner,
Bargaining power of the buyers – The bargaining power of the buyers are quite high
in the Australian retail industry due to presence of many retail organizations and
supermarkets.
Bargaining power of the suppliers – The bargaining power of suppliers has enhanced
due to the presence of majority of big players in retail industry of Australia (Balaji and Roy
2017).
Threats of the new entry – The threats that are faced by retail organizations in
Australia based on entry of new organizations are quite low due to the large size of retail
firms in the country.

4MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Rivalry among the existing players – The huge levels of competition that are faced
retail firms have enhanced the rivalry among different firms in Australian retail market
(Gattorna 2017).
Threats of substitutes – The threats of substitutes faced by retail organizations are
low as the availability of alternatives of retail products in Australia is low (Home.kpmg
2020).
About Koala Mattresses
Koala Mattress is a young organization that combines some of the best inventions that
have been made in the last 100 years and help in the development of the high quality
furniture. The organization also aims at replacing the awful practices of the industry which
mainly include overpricing of the goods. The showrooms of the firm are able to provide a
complete experience to the customers that range from high technology based designs and
instant delivery as well (Au.koala.com 2020).
Development of the alternative channel structures for Koala Mattresses
Diagrams based on different channel structures
Structure 1 – Created by author – Wholesale channel
WHOLESALER RETAILER
WEBSITE AND
SHOPS
CONSUMERS
PRODUCER CONSUMERS

5MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Structure 2 – Created by author – Direct channel
Structure 3 – Created by author – Retail channel
The three structures that can be considered for the implementation in Koala Mattress
include wholesaler channel, direct channel and retail channel.
Discussion of number of levels in a channel
Wholesaler channel- This structure consists of different levels that include
wholesaler, retailer, websites or shops and consumers. This channel is based on different
levels that have to be considered before reaching the consumers.
Direct channel – The direct channel is mainly based on the ways by which products
can provided to the consumers by the organization directly. The number of levels in the
structure are less in comparison to the other structures.
Retail channel – The retail channel is mainly related to different levels that include
producers, retailers and the consumers. The products can reach the consumers in comparison
to the wholesaler channel.
Discussion of advantages and disadvantages of the channel structure options
Wholesaler channel –
PRODUCER RETAILER CONSUMER

6MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Advantages – The presence of different levels helps in proper distribution of the
products to various consumers.
Disadvantages - The time required to reach the consumers with the help of this
structure is higher in comparison to other channels.
Direct channel –
Advantages – The direct channel helps the organizations to provide the desired
products to consumers within less amounts of time.
Disadvantages - The disadvantages in this case are related to the lack of proper
channels to reach consumers.
Retail channel –
Advantages – The retail channel is based on implementation of three major aspects
that include producers, retailers and consumers.
Disadvantages - The disadvantages faced by retail channels are based on the proper
communication that has to be developed between various levels.
Currently Koala uses direct channel structure in order to offer the products to
consumers. However, the implementation of wholesale channel structure will be effective for
improvement of the future operations of Koala Mattress in the industry. The implementation
of outsourcing will be able to play a major role in improvement of revenues and profitability
of Koala Mattress. The additional customer care teams can be used in order to enhance the
communication with the consumers through the website. The development of physical stores
can improve the visibility of products that are offered to the consumers.

7MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Selection of possible channel members for Koala Mattresses
The channel members of Koala Mattress who will be able to provide the organization
with maximum levels of support mainly include the suppliers, the financial support providers
and promotional partners as well. The financial support will be mainly required by the
organization will be able to play a key part in the methods by which Koala Mattress can start
its physical stores (Ibisworld.com.au 2020). The physical stores will be able to offer the
products to customers who are not tech-savvy in nature. The company will aim at the
development of stores in such a manner so that the environmental footprint of its operations
on the environment (Wei et al. 2018).
Product positioning, brand strategy and channel management of Koala Mattresses
Product positioning strategy of Koala Mattress – The positioning strategy that has
been implemented by Koala Mattress is mainly application based in nature. The application
based strategy is mainly related to the ways by which products of Koala Mattress are
manufactured in order to fulfil the needs of consumers. The company aims at the
development of quality products that are affordable in nature and trial period is also provide
to them (Statista.com 2020).
Brand strategy implemented by Koala Mattress – The branding strategy of Koala
Mattress is considered to be a critical aspect of the business strategy that is able to offer the
organization with a sustainable competitive advantage. The sustainable and environment
friendly operations of Koala Mattress have been a major part of the branding strategy of the
firm (Yang et al. 2017).
Channel management by Koala Mattress – The proper management of different sales
and distribution based channels have been based on the products that are offered through the
website based on customer needs (Wollenburg et al. 2018).

8MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
Recommendations
The major recommendations that can be provided to Koala Mattress include,
 Development of physical stores to reach different customers.
 Enhancing the sustainable use of resources of the organization.
 Development of promotional activities to increase awareness of products.
Conclusion
The report can be concluded by asserting that Koala Mattress has been successful in
the proper formation of marketing channels and reaching the customers through its website.
However, the development of online stores can play a major role in improving the customer
base of the organization.

9MARKETING CHANNEL AND DESIGN OF KOALA MATTRESS
References
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