Media Plan: Analysis of Marketing Channels and Distribution Strategies

This report provides a comprehensive overview of marketing channels, exploring their significance in connecting goods and services with consumers. It details the different types of marketing channels, including direct selling, selling through intermediaries, dual distribution, and reverse channels, highlighting their unique characteristics and applications. The report delves into the advantages of utilizing marketing channels, such as cost savings, time efficiency, convenience for customers, and increased customer reach. It also examines the potential disadvantages, including reduced revenue, loss of customer affiliation, and channel conflicts. Furthermore, the report emphasizes the importance of supply chain management in maximizing the benefits of marketing channels and mitigating potential drawbacks. By analyzing these factors, the report provides valuable insights for businesses seeking to optimize their distribution strategies and achieve their marketing objectives.

Media plan:
a. Different types of marketing channels:
A marketing channel is a way in which goods and services are created to meet the needs
of the consumer. All goods go through distribution channels, and a company's marketing
will depend on how their goods are delivered. The roadmap with which the product goes
from the production site to the consumer is essential because now the marketer will have
to decide which path or channel is best for his particular work (Chron,2019).
Marketing channels are an effective way to ensure that their products reach the
customers they want. Marketing channels are often integrated to provide increased profits
for the business. For a business, to fulfil the initial goal, they must know these marketing
channels. Any business should consider maximizing its marketing funnel to ensure that
customers receive their products. According to Statista, using marketing channels can help
increase engagement early.
They are so important that without them, the customer might not receive the product at all.
The marketing channels are equally beneficial for manufacturers. Manufacturers rely on
them to ensure that their products are sold effectively.
Most products require the use of marketing channels to distribute effectively to consumers,
so a marketing channel has many advantages. Firstly, it helps the company save more
money. When a business uses distribution channels, they end up spending less than if they
did the task themselves. If they handle each of the steps necessary to get the product into
the hands of their target customers on their own, it could cost them a lot of money.
Members of the marketing funnel know what to do and what measures to take to reduce
costs. Saving time is the second benefit of it. Marketing channels can also help businesses
save more time. They don't need to spend time figuring out how to distribute their
products. The spare time they spend can be used to increase the company's productivity.
When they decide to sell directly to consumers, they may incur additional costs. Expenses
include renting a warehouse, hiring labour and shipment. All of these can cost them more
than they use a marketing channel. They will not be able to focus solely on production. This
means they have to turn their attention to other parts of the business. Distribution channels

help them focus on producing what their customers need. The third advantage is
convenience. Using distribution channels is more convenient for customers. Customers do
not have to go to different companies to buy other products. The distribution channels
ensure that customers receive a variety of products from the same retailer. Therefore, they
can purchase various products from different manufacturers without wasting time and
travel fees. Fourthly, cost reduction. Because intermediaries become accustomed to settling
transactions, they become cheaper over time. Businesses do not have to worry about
bargaining with their customers. The middleman has linkages with customers and helps with
transactions. Fifthly, attracting more customers. As a manufacturer, their goal is to ensure
that customers buy their products. They may spend additional costs, trying to increase the
number of customers who buy their product. However, when they use intermediaries, it can
be a way to reach out to more customers. They help manufacturers sell more. Middleman
also helps customers find products. Customers can find products when they shop at a retail
store. This is better than going to the manufacturer. Manufacturers can also focus on
producing the goods that the customer needs. They place their products in many different
retail stores so that customers can access more. Distribution channels, therefore, provide
the link - possibly indirectly - between producer and consumer. Deliver products quickly is
the sixth advantage of marketing channel. Distribution channels may be responsible for
delays in customer receipt of products. However, sometimes they can also become quick.
Customers don't want to wait long before receiving products. This is very important for
online businesses. Suppose businesses want to ensure that when customers order from
them, they can deliver the product as soon as possible. If they can't do this, it will cause
customers to consider shopping from other local retailers. Using distribution channels
reduces product delivery time. Seventhly, increase inefficiency. Each level of a marketing
funnel has its specialization. It helps increase supply chain accuracy. The producer does not
have to worry about how the goods will be delivered to the customer. All efforts can then
be directed towards the manufacture of useful products for the customer. Distributors have
skills to receive, manage and distribute products. Retailers are experts in delivering products
to customers. By using direct distribution, businesses' costs can be significantly higher than
if they were using marketing channels. Finally, access to customers. Since retailers provide a
link between the customer and the manufacturer, they can provide insight into what the

customer needs. This critical information can be used to create trending products. Knowing
the latest trends provides a more accurate description of the goods to be produced.
However, all of these benefits are only possible when businesses use supply chain
management. Let's also check out some of the disadvantages they may experience. The
distribution channels also have some potential adverse effects. These disadvantages can
lead to reduced sales and losses. First of all, reduced revenue. Once businesses use
distribution channels, they will sell their products at a lower price. This is a lower price than
the price that retailers sell to customers. For retailers to make a profit, they must sell at a
higher price. They cannot deliver products of businesses without any benefits. If businesses
sold directly to customers, they would get a more significant profit margin - as simple as
that. Distributing products to customers leads to complete control of profits. Other damages
businesses may face due to direct retail payments or shipment payments. All these costs can
lead to losses. Secondly, not directly affiliated with customers. When a retailer receives a
product from the company, they can make some changes to try to increase sales. This is bad
for the business. Customers may not recognize their products from time to time. Businesses
will then lose the link between the customer and the company. Customers will no longer
turn to their brands. Instead, they can buy from competitors. Furthermore, they are
responsible for what products they produce. However, retailers have more control over the
message delivered to customers. The worst that can happen is if a retailer lied about the
benefits of the product. Once customers realize that, they will underestimate a business'
product. Thirdly, loss of product value. The problem with using distribution channels is that
businesses cannot control the product. This means that hp5 may have no control over the
image a customer has of their brand. Sometimes there may be a delay in shipping. Because
of this, their product may lose value before it reaches the customer. If this continues, it will
lead to losses. Complexity is the fourth disadvantage of marketing channels. Some
distribution channels require a certain number of participants. In such cases, businesses can
be confusing. Adding more members to a marketing funnel creates distribution delays. This
will also decrease customer reviews of your product. Fifthly, too many people involved. If
they have too many middlemen in a marketing funnel, it can increase costs. Paying all
intermediaries will cost them a lot. This additional revenue can be used to expand your
businesses. If businesses don't pay their middlemen directly, they can raise prices as a way

to make a profit. This affects customers, as they pay very high fees for the products of
businesses. Confusion is the final drawback of it. Channel members can sometimes have
conflicts of interest. It happens whenever roles and responsibilities overlap. Once a dispute
arises, it can lead to a significant loss that could affect the business. Conflicts usually arise
when there are several distributors. Management becomes an issue. Problems with supply
chain management cause conflicts. These conflicts, if not resolved, can lead to severe losses.
There are four types of marketing channels, including direct selling, selling through
intermediaries, dual distribution and reverse channels. One channel can be retail stores,
websites or mail-order categories as well as direct personal contact information by mail,
email or text message. Here is a bit more details on each.
 Direct selling - manufacturers sell directly to customers or online stores
mainly use this:
Direct selling is the marketing and sale of products directly to consumers who are far away
from a fixed retail location. This method of selling can eliminate the need for middlemen -
wholesalers, retailers direct sales participants are independent contractors, they define how
much time and energy they want to invest in, and directly set up a time to sell marketing
and promotion plans, or define how to build a sales team, and service their store. They are
independent sales reps and their bosses. Direct selling is also a way to own a business with
minimal investment. Peddling is the oldest form of direct selling.
Direct Selling differs from Direct Marketing because when selling direct, individual sales
staff sell their products by dealing directly with customers. Direct marketing is a business
organization looking for a relationship with their customers without going through
consulting or reseller. Direct selling often uses multi-level marketing (salespeople are paid
to sell and recoup sales, in addition to selling directly to customers, they can also hire other
employees by themselves to be their official distributor and enjoy commissions sold by
themselves and their distributors) rather than single-level marketing (salespeople benefit
only on the products they sell)
Modern direct selling includes sales made through party plans, live demonstrations,
personal contact arrangements, as well as internet sales.

A textbook definition is: "The direct personal presentation, demonstration, and sale of
products and services to consumers, usually in their homes or at their jobs."
Industry representative, World Federation of Direct Selling Associations (WFDSA), reported
that its 59 regional member associations accounted for more than the US 114 billion USD in
retail sales in 2007, through its of more than 62 million independent sales representatives.
The American Direct Selling Association (DSA) reports that in 2000, 55% of adult Americans
had ever purchased goods or services from a direct selling agent, and 20% said that they
were present (6 %) or ever bought (14%) a natural selling agent.
According to WFDSA, consumers benefit from direct selling because of the convenience
and services it offers, they are provided with complete product information, home
delivery, and guaranteed satisfaction. In contrast to franchising, the cost for an individual to
start an independent direct selling business is usually very low and less, or there are no
inventory requirements or other commitments to get started.
Most direct selling associations, including the Bundesverband Direktvertrieb Deutschland,
the German direct selling association, WFDSA and DSA, require their members to adhere to
codes of conduct towards fair partnerships. Both to customers and salespeople. Most
national direct selling associations are represented in the World Federation of Direct
Selling Associations (WFDSA).
 Selling Through Intermediaries - make products available to customers
through wholesalers and retailers:
A marketing channel is where intermediaries such as wholesalers and retailers are used to
delivering a product to a customer, which is called an indirect channel. The most indirect
channel marketers can use (Manufacturers -> agents -> wholesalers -> retailers ->
consumers) is used when there are multiple manufacturers Small and multiple small
retailers or an agent are used to helping large coordinate supply of the product. Dual distribution - more than one marketing channel is used to get a
product to consumers:

Dual distribution describes many types of marketing arrangements that manufacturers or
wholesalers use simultaneously to reach end-users. They can sell directly to end-users as
well as sell to other companies for resale. Using two or more channels to appeal to the
same target market can sometimes lead to channel conflicts. An example of a dual
distribution is a franchise in the form of a business in which franchisors license the
operation of some of its units for the franchisee to simultaneously own and operate several
entities.
 Reverse Channels - it is the opposite of the others; it flows from the
consumer to an intermediary and then to the beneficiary:
In terms of flow, it does not have any in common with the previous three channels. Each
flow from the producer to the intermediary (if any) to the consumer.
Technology has created a different flow, however. It goes in the opposite direction and can
go - from consumer to middleman to the beneficiary. Think of making money reselling
products or recycling.
There is another difference between the islands and the more traditional channels - the
referral of the beneficiary. Otherwise, no manufacturer found. As a result, only users or
beneficiaries found.
b. Evaluate how marketing channels of communication integrated within an
organizational context:
PepsiCo Inc. (PEP) is a leading food and beverage company with an impressive global
presence. Then in 1994, PepsiCo officially entered the Vietnamese market when a joint
venture with IBC International Beverage Company with the introduction of the first two
products, Pepsi and 7 Up, from the early days when the US removed its embargo against
Vietnam in 1994. Pepsi has used many active strategies in its fierce competition with
strong competitors in the Vietnamese market, such as Coca-Cola and other brands. Some
of the main reasons include branding and distribution strategy. Pepsi was founded nearly a
century ago. Consumption and reputation are far behind Coca-Cola. But in the first year of
the 1990s, Pepsi was honoured to be ranked 7th among the ten largest corporations in the
United States, becoming Coca-Cola's biggest and most potent competitor. This makes the
world's economists look at Pepsi with a completely different eye, and at the same time

makes Coca-Cola feel insecure. The Vietnam beverage market is increasingly fierce, with
high growth. Each year, domestic and foreign manufacturers continuously launch new
products or change product packaging. It can be said that Vietnam's drinking water market
is increasingly Westernized with more and more diversified products. Pepper is still young
people, aged 15 - 35, to enrich the company's products and meet the needs of customers.
For Pepsico's longstanding rival, it is Coca-Cola. In the world market, PepsiCo is still pursuing
Coca - Cola. Nevertheless, in Vietnam market, Pepsi is the leader and always a pioneer, so
the high concentration orientation is what PepsiCo needs to have. In order to be able to
focus its financial power more and compete with Coca-Cola in the markets. That is the
marketing concept Pepsi has been introduced since the early 1960s. Traditional marketing
activities - PepsiCo customers aim to develop products for themselves as "the new
generation" for young people. Still, here, Pepsi's carbonated products are suitable for
everyone, from drinks to athletes, everyday people or obese people. It can be said that
PepsiCo's customers are diverse and plentiful. PepsiCo Vietnam always focuses its product
development on customers. Pepsico sponsors charity funds to resonate instead of mass
promotion, supporting a national team.

The company's products access the Vietnamese market through the following three
channels: direct store delivery (or DSD), customer warehouse, and third-party distributor
networks. PepsiCo chooses the right distribution channel based on the needs of Vietnamese
customers as well as product characteristics and local commercial practices.
 Direct store delivery:
Manufacturers sell directly to customers; online stores mostly use this. Under the DSD
system, PepsiCo distributes items directly to retail stores in Vietnam. Out of the three
channels, DSD allows PepsiCo to sell with maximum visibility as well as empowers PepsiCo
to sell shares with the highest awareness. It is more suitable for products that are added
regularly and are sensitive to promotions and marketing and display. PepsiCo Vietnam
employees are required to take new orders from the grocery store and convince the
stores and deliver the previous orders to the stores. The employees are even responsible
for putting products on the shelves. Every day, employees have to meet a specific number of
customers. The usual practice is to take manual orders. The staff distributed snacks and
beverages directly to thousands of distribution points ranging from small shops and
Source: Suntory PepsiCo (2020)

supermarkets to large warehouses like hypermarkets. PepsiCo Vietnam makes sure that
products arrive at the store at the right time and also correctly arrange them on the shelves,
making sure the products are fresh and handled appropriately. Products are organised by
PepsiCo Vietnam so that it attracts the maximum visibility of passersby. PepsiCo Vietnam
often uses the DSD system to launch new products in a relatively short time. Because
PepsiCo employees have directly interacted with retail store owners so they can more easily
assess the market's response to a particular product. Retailers benefit from the DSD system.
With this system, retailers had to incur the labour costs required to unload trucks and place
products on shelves. They have used it successfully to connect with an extensive network
of retailers along with maintaining a good relationship with them. They even use this to
test out new products and their feedback.
 Customer warehouse:
This is a distribution channel that is less expensive than the DSD system but as effective as
the DSD system. Brokerage warehouse system is where they have no direct access; they
have used this approach to reach areas outside of the reach of their immediate
network.PepsiCo Vietnam employed third-party distributors to distribute products to the
stores from PepsiCo's warehouses to retailer warehouses and retail stores. It is ideal for
products that are fragile, less perishable, less delicate as well as have lower sales and
should not be purchased impulsively and negligently. The items in this category include
drinks, sports juice and juice.
 Third-party distributor networks:
PepsiCo V&FS (Vending and Food Service) sales personnel distributed its products through
third-party V&FS and bottling companies. PepsiCo distributes Pepsi beverage products to
restaurants, businesses, schools and stadiums through third party food services, outside
food management, the distribution of merchants and administrators, vending distributors
and operations. The higher margin rates are achieved in this system because the bottlers
only have to supply the syrup, resisting conducting the entire bottling effort and thereby
increasing the dealer profit. In 1993, commercial law in Vietnam did not allow established
businesses with 100% foreign capital. Therefore, PepsiCo Group must find domestic
partners, and Chuong Duong - Tribeca is PepsiCo's first choice. At this time, Tribeca is
dominating the confectionery and soft drink market in Vietnam. The cooperation with
Tribeca is not only a step for PepsiCo to dominate the market quickly but also helps PepsiCo

to fully grasp the needs and tastes of consumers in Vietnam. There is also KFC Fried Chicken
that was acquired by PepsiCo Group in October 1986. KFC has expanded operations in 57
countries, and throughout 1989, KFC opened 3,000 more overseas units, becoming the
largest overseas franchise chain in the US. In Vietnam, up to now, KFC has more than 140
stores, mainly in big cities such as Hanoi or Ho Chi Minh City. In KFC's menu, Pepsi is always
one of the main factors; it is preferred and attracts many diners. The image of a Pepsi cup
next to the fragrant fried chicken is familiar to Vietnamese consumers today. It can be said
that associating with KFC is a turning point of PepsiCo success not only in Vietnam but also
in the world. On September 7, 2004, PepsiCo Vietnam Company and Kinh Do Joint Stock
Company signed a business cooperation agreement, opening the business cooperation
between beverage companies under a multinational corporation (PepsiCo) and domestic
reputable confectionery company. Kinh Do is still known as one of the "tycoons" of the
confectionery market in Vietnam. This combination has brought PepsiCo new market shares
and increasingly proved its potential with direct competitors such as Cocacola or Wahaha.
Moreover, PepsiCo Vietnam quickly negotiated and signed an association contract with
Subway - a strong American burger brand - in early 2011. With this cooperation, PepsiCo can
provide for customers with a wide range of products including healthy products, such as
Pepsi Cola, Pepsi Light, Aquafina bottled purified water, Isotonic 7up Revive drinks at all
Subway stores. Regardless of its partner, PepsiCo always maintains its brand name and
expands its market share. Indeed, in the future, PepsiCo Vietnam Group will bring new
features and specialities in the culture and eating habits.
 Leveraging its dominant position:
Over the past 22 years of establishment and development, Pepsi has now become one of
the leading brands in the home beverage industry in Vietnam. Favourable relationships
with its retailers in Vietnam, who allow the company to have large shelf spaces in their
stores. This helps PepsiCo not only influence the way consumers buy but also increase the
coincidence of purchasing food products and supplements. In addition, consumers can
invest in PepsiCo through exchange-traded funds (or ETFs) such as Standard Exchange and
Consumer Exchange Fund Staples Select Sector Standard & Poors (or SPDR) Fund ( XLP) and
SPDR MSCI World Quality Mix (or ETF) exchange-traded fund (QLD). PepsiCo also produces
and distributes some licensed trademarks from Dr Pepper Snapple Group, Inc. (DPS) such as
Dr Pepper, Crush and Schweppes, as well as certain brands of fruit juices licensed from Dole

and Ocean Spray, Pepsi Vietnam has now expanded its business to include other product
lines such as bottled water, fruit juice, energy drink and tea with typical products such as
Sting, Twister, Lipton Ice Tea, Aquafina, Oolong Tea Plus, Moutain Dew. The extensive
distribution of PepsiCo and The Coca-Cola Company (KO) gives them a competitive
advantage over other non-alcoholic beverage manufacturers in Vietnam.
 Distribution channel members:
 Producer:
Pepsi Beverages Corporation - responsible for
manufacturing and supplying juice to factories that are
responsible for brand promotion and management.
Pepsi Boffling Ventures - responsible for manufacturing,
stockpiling, distributing and providing services for Pepsico
products.

 Wholesalers:
Functions: + Purchase, sale, import and export procedures, warehouse layout
+ Provide information on the latest market trends, tastes, materials and quality
regulations.
Conditions: Guarantee and commitment to the company:
+ Sales
+ Provide feedback
+ Enjoy commission
+ Penalty and cut if violated
Pepsi has more than 52 distributors stretching from north to south.
 Retailers:
Retailers are under the supervision of the company through wholesalers. Retailers are
organizations or individuals, including grocery agents, supermarket (such as BigC, Co.op
Mart, Lottemart), movie theatres (like CGV, Lotte) and fast food stores. Although these
retailers have diversified and diversified distribution systems, they not only distribute
PepsiCo's product lines but also those of competitors. The primary purpose of the company
when distributing to retailers is to introduce effective products with beautiful and
recognizable display space, and retailers can do so because they sell a lot of sales. High and
has plenty of room to showcase items.
 Agencies:
PepsiCo Vietnam agent has three primary distribution agents in three regions of the
country: Ho Chi Minh City, Da Nang City and Hanoi Capital. From these three provinces, it is
possible to distribute to other provinces in the region and from there to consumers.
 End consumers:
As individuals or organizations that consume products for their own life - those who directly
use PepsiCo products. The end consumer makes up the company's target market and has a
direct influence on the sales of channel members of a producer.
 Distribution channel structure of Pepsico Vietnam:
By length (3-level channel): Manufacturer -> Wholesaler (wholesale agent) -> Wholesalers
(distributor,supermarket) -> Retailers (fast food store, cinema center, grocery, supermarket,
restaurant) -> Consumers.