Marketing and Management: Hybrid Distribution Strategy Analysis

This report examines the hybrid distribution strategy, a method of multi-channel distribution designed to serve specific product markets, adopted by firms to meet customer demands, reduce costs, and increase market share. The report analyzes the importance of this strategy to firms, highlighting its adaptability to changing customer needs and shopping patterns, and its ability to cater to broad product lines. It explores both the positive and negative effects of this strategy, including cost minimization, increased coverage, and speed, while also addressing challenges such as conflicting demands on resources and potential customer dissatisfaction. The report further delves into the conflicts arising from internal and external channel dynamics, and the impact of these conflicts on channel performance and the product life cycle. It references key academic sources to support its findings, providing a comprehensive overview of the strategy's implications in marketing and management.

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Description
Hybrid distribution strategy is the method of multiple channel distribution that is done
to serve a specific product market. The reason for the establishment of hybrid channels by
firms is to meet the customer desire with reduction in costs and further increasing the market
share. This method had been adopted by IBM with a view to meet the current trend by
intensely alternating the demands of the channel managers (Webb & Hogan, 2002).
Importance of Hybrid distribution strategy to Firms
Firms have adopted this strategy not to benefit the coalition of individual channel
within the firm but even serve the needs of diverse market segments. The adaptability of the
changing customer needs and shopping patterns ascertain the response to new distribution
channels and the development of internet. This enables the new channels to focus on target
markets with involvement of competitiveness. Also, the use of different channels in
distribution caters to broad product lines for optimal utilization which is not possible from
one type of channel. It even help firms with excess manufacturing capacity concerning
additional outlets so that the supply does not turn out to be saturated for the existing channels
(Webb & Hogan, 2002).
Positive and Negative Effects of Hybrid Distribution Strategy on Firms
Many distributors maintain “creative control” with the help of hybrid distribution
strategy through using resources and maximising distribution by choosing partners
(Indiewire, 2009). Additional to this, ideally, the firms establish the strategy for corporate
motivation with three advantages:
 Cost – Minimizing the sales expense through hybrid resource count relative to cost of
those accounts
 Coverage – The quantity of customers with various distribution of channels

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 Speed – Widely spread and customer’s access (Gassenheimer, Hunter & Siguaw,
2007).
The strategy does not give only positive effects to the firms but it has to go through
some challenges as well. The different channels have conflicting demands on the firm’s
resources by raising the matter of customer dissatisfaction. The inter and intra firm conflict
gives rise to two opposing scenarios where on one hand, the usage of resource competition
can lead to efficient allocation and on the other hand, internal issues within the channel group
can reduce the orientation of customers amongst the channel managers (Webb & Hogan,
2002). The conflict of coalitions can even be because of need of diverse set of resources
despite the presence of scarce resources at other’s expense. The perception of behaviours is
one of the issue that can enable another coalition such that advent of perceptual measures
have strong relationship with conflict episodes.
The two areas of dysfunction come in channel performance and customer
dissatisfaction due to opponent centred behaviours of the individual channels (Webb &
Lambe, 2207). If analysed from the supplier’s part, conflict arisen internally can lead to
horizontal conflict while paving the path for vertical conflict with the channel partners.
Internet channel also arises conflict when integrating agents with claim offices in an direct
sales model online (Coelho & Easingwood, 2004). The effect of conflict can be deadly for the
demand life cycle of the product that can affect the new entrants with single distribution
channel because of multiple channels introduced at the initial phase. This can further lead to
denial of internal resources in coalition with the loss of successfully seizing the customer
base in the market (Webb & Hogan, 2002).

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References
Coelho, F. J., & Easingwood, C. (2004). Multiple channel systems in services: pros, cons and
issues. The Service Industries Journal, 24(5), 1-29.
Gassenheimer, J. B., Hunter, G. L., & Siguaw, J. A. (2007). An evolving theory of hybrid
distribution: Taming a hostile supply network. Industrial Marketing Management,
36(5), 604-616.
Indiewire (2009). Declaration of Independence: The Ten Principles of Hybrid Distribution.
Retrieved from https://www.indiewire.com/2009/09/declaration-of-independence-the-
ten-principles-of-hybrid-distribution-246466/
Webb, K. L., & Lambe, C. J. (2007). Internal multi-channel conflict: An exploratory
investigation and conceptual framework. Industrial Marketing Management, 36(1),
29-43.
Webb, K., & Hogan, J. (2002). Hybrid channel conflict: causes and effects on channel
performance. Journal Of Business & Industrial Marketing, 17(5), 338-356. doi:
10.1108/08858620210439031