Report on Marketing Channel Design and Integration for Koala Mattress

This report provides an analysis of the distribution channels employed by Koala Mattress, a company focused on improving habitats and minimizing consumption. The report focuses on the potential for a new "cooling mattress" product and the need for effective marketing channel development. It identifies the main distribution tasks, emphasizing the role of the company's website and intermediaries. Three alternative channel structures—direct, retail, and wholesale—are discussed, with their respective advantages and disadvantages. The report suggests that the wholesale channel is the most effective structure for Koala Mattress, particularly for procuring raw materials and managing suppliers. The report concludes that by improving its distribution channels and introducing a new cooling mattress, Koala Mattress can maintain and improve its revenue streams.

Running head: MARKETING CHANNEL DESIGN AND INTEGRATION
MARKETING CHANNEL DESIGN AND INTEGRATION
Name of the Student
Name of the University
Author Note

1MARKETING CHANNEL DESIGN AND INTEGRATION
Executive Summary
The report is based on the analysis of the distribution channel that has been implemented by
Koala Mattress. The new product named “cooling mattress” that has been suggested for
development and the need for the development of marketing channels have been discussed in the
report in detail. Three structures have been suggested along with the advantages and
disadvantages of that are part of their implementation as well. The most effective structure that
can be implemented by the organization for its future operations have been discussed in the
report.

2MARKETING CHANNEL DESIGN AND INTEGRATION
Table of Contents
Background of the organization.......................................................................................................3
Identification of the main distribution tasks....................................................................................3
Discussion of several alternative channel structures.......................................................................4
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

3MARKETING CHANNEL DESIGN AND INTEGRATION
Background of the organization
Koala Mattress is a young company that aims at combing two of the most effective
inventions in the last 100 years which include the internet and furniture. Koala Mattress mainly
aims at improving the habitats and minimizing the levels of consumption as well. The
environmental footprint of the organization can also be reduced with the support that is provided
by the sustainable operations of Koala Mattress in the industry. The organization has also tried to
replace the different industry practices that mainly include showrooms and overpricing of the
products as well (Au.koala.com 2020).
The company mainly provides effective experiences to the customers that include the
high technology based designs and instant delivery options as well. The products that are offered
by Koala Mattress to the customers include bed base, mattress, sheets, pillows, bookshelf, sofa,
TV unit, slumber set and dream bundle. The new range of products that can be suggested to
Koala Mattress in order to improve its operations and levels of profitability in the industry
include a range of the cooling mattresses. Cooling mattresses will prove to be a different type of
product that can fulfil different types of needs of the customers and can also reduce the
environmental footprint of the firm (Au.koala.com 2020).
Identification of the main distribution tasks
The website of Koala Mattress is considered to be a major part of the distribution channel
that is used in order to reach the customers faster. The new product that has been suggested to
Koala Mattress in order to improve its product portfolio is a “cooling mattress”. The website of
the organization will be able to play the most important role in the ways by which Koala
Mattress can reach the customers. The improvement of distribution channel is considered to be

4MARKETING CHANNEL DESIGN AND INTEGRATION
an important aspect related to the manufacture of the new product. Special handling will be an
important part of the enhancement of distribution channel of the Koala Mattress (Bellin 2016).
The new “cooling mattress” will be able to reach the customers with the support that is provided
by the intermediaries.
The intermediaries are considered to be highly important for proper improvement of the
distribution channel of Koala Mattress. The outsourcing of some of the production based
processes will be able to support the improvement of distribution channel of Koala Mattress in
the industry (Datta and Sanyal 2016). The new products can be provided to the customers with
the help of different stores that are located in the country. The partnerships that are developed by
Koala Mattress with the stores will be able to improve the speed of distribution of the
organization. The major tasks that are needed in the distribution channel are mainly based on the
inclusion of different suppliers and intermediaries. The suppliers or intermediaries will be able to
support the distribution process of the organization and providing the new products to customers
in different parts of the country (Gudonavičienė and Alijošienė 2019).
Discussion of several alternative channel structures
The three different channel structures that can be suggested to Koala Mattress in order to
reach the customers are as follows,
Structure 1 – Direct channel
Figure 1 – Direct channel
PRODUCER CONSUMERS

5MARKETING CHANNEL DESIGN AND INTEGRATION
Source – Created by author
Structure 2 – Retail channel
Figure 2 – Retail channel
Source – Created by author
Structure 3 – Wholesale channel
Figure 3 – Wholesale channel
Source – Created by author
Structure 1 – Direct channel –
Advantages – The speed of distribution with the help of direct channel is fast as the
organizations are able to reach the customers directly and easily.
Disadvantages – The absence of intermediaries increasing the responsibilities that have
to be fulfilled by the management of the organizations.
Structure 2 – Retail channel –
PRODUCER RETAILER CONSUMERS
PRODUCER
WHOLESALE
R
RETAILER CONSUMERS

6MARKETING CHANNEL DESIGN AND INTEGRATION
Advantages – The retail channel consists of the producers and the retailers that can help
an organization to reach the consumers. Retailers can act as major intermediaries who are able to
support the operations and production process of the firms (Johnston and Cheng 2018).
Disadvantages – The presence of intermediaries can reduce the speed of operations and
the efficiency of distribution channel will also reduce.
Structure 3 – Wholesale channel –
Advantages – The wholesale channel is able to support the production and manufacturing
process of the organizations. The wholesalers and retailers will be able to play a major role in the
proper development of the structure of distribution channel (McIntyre, Melewar and Dennis
2016).
Disadvantages – The requirement of proper partnerships can increase the amount of time
that is needed for proper completion of production and manufacturing process.
The new product range that has been suggested to Koala Mattress, that is, the “cooling
mattress” can be manufactured in an effective manner with the help of the implementation of
wholesale channel. The wholesale channel will lead to the procurement of raw materials that
required for proper manufacture of the product. The suppliers will be major part of the
distribution channel that has been formed by Koala Mattress. The parts of the procurement
process can be outsourced to the different suppliers so that the manufacturing speed can be
increased (Shareef, Dwivedi and Kumar 2016).
The levels that are a part of the wholesale channel can influence the quality of products
that will be offered to the customers. The wholesalers are able to play the most important role in
development of the new products that will be offered to the customers. Quality of raw materials

7MARKETING CHANNEL DESIGN AND INTEGRATION
is considered to be a major factor that can have an impact on the improvement of the product
quality as well. The development of own stores of Koala Mattress can enhance the costs of
production. The distribution of products to different stores will be able to support the increase in
reach of new products (Nawaz et al. 2019).
Conclusion
The report can be concluded by stating that Koala Mattress will be able to maintain its
revenues with the help of its new product “cooling mattress” that is suggested. The improvement
of distribution channel will be able to support the production and process of distribution of the
new products to the customers.

8MARKETING CHANNEL DESIGN AND INTEGRATION
References
Au.koala.com 2020. I adopted a koala with Koala!. [online] Koala. Available at:
https://au.koala.com/our-mission [Accessed 21 Jan. 2020].
Bellin, H., 2016. Branding and marketing channel strategies: Some effects on channel
partners. Journal of Marketing Channels, 23(4), pp.255-257.
Datta, S.K. and Sanyal, S.N., 2016. Integrated Marketing Channels. Strategic Marketing
Management in Asia: Case Studies and Lessons across Industries, pp.403-424.
Gudonavičienė, R. and Alijošienė, S., 2019. The Specific Features of Marketing Channel
Design. Engineering Economics, 56(1).
Johnston, W.J., Le, A.N.H. and Cheng, J.M.S., 2018. A meta-analytic review of influence
strategies in marketing channel relationships. Journal of the Academy of Marketing
Science, 46(4), pp.674-702.
McIntyre, C., Melewar, T.C. and Dennis, C., 2016. Multi-channel marketing, branding and
retail design: New challenges and opportunities. Emerald Group Publishing.
Nawaz, M.Z., Nawaz, S., Shafique, M.N., Ali, M. and Ishfaq, M., 2019. The Role of
Organizational Strategies, Social Support, and Technological Capabilities in International
Marketing Channel Performance. Sarhad Journal of Management Sciences, 5(1), pp.87-102.
Shareef, M.A., Dwivedi, Y.K. and Kumar, V., 2016. Exploring multichannel design: Strategy
and consumer behaviour. The Marketing Review, 16(3), pp.235-263.