Distribution Channels, Expand Market Reach

¶ … Distribution Channels, Expand Market Reach

The article appears in Business Wire, July 6, 2000, and concerns the transfer of an exclusive license for commodity multipurpose papers bearing the Xerox brand name to Georgia-Pacific Corp. This license gives the latter the right to distribute the paper, used for printing, copying, faxing and other business purposes, within the United States and Canada. The specific paper product includes: Xerox cut-sheet and production rolls of Xerox Premium Multipurpose 4024DP, Xerox Multipurpose 4200DP, and Xerox Primary Image business papers.

Georgia-Pacific will then use the Xerox brand name to sell the line of papers, and use Unisource Worldwide as distribution channel. Xerox and Georgia-Pacific will continue to work together as they have for more than 30 years. Existing distribution channels will continue to be served, while further channels will be sought for expansion purposes. Furthermore the agreement entails continuing to use Xerox sales representatives and distribution partners.

The purpose of the agreement is to further expand the distribution of the already popular product, to improve service, and to expand ways of distributing the paper while continuing to coexist in a profitable partnership. In this way, each company will bring its particular strengths to compliment the venture. Xerox's reputation as giant in technology, equipment and quality of products is then supplemented with Georgia-Pacific's leadership in manufacturing and marketing.

All the companies involved then, together with the distribution channels, are beneficial for the expansion of Xerox's product throughout the United States and Canada. The paper being distributed is an already popular product with the public. The fact that the brand name remains intact will further benefit the venture, as the product is well-known. The distribution of the product nationwide and in Canada is helped by the partnership among the companies involved.

The specific distribution channel is also chosen wisely, as a basis already exists for the product in these regions. From here further expansion, both nationally and globally, is most likely to be successful. The partnership and choice of companies thus contribute to the success of Xerox and its products.

Channels of distribution are extremely important in every business venture. These need to be established in conjunction with the nature of the product or service being distributed. This information is vital to the success of the business. Distribution entails exposing the product or service involved to the maximum amount of people to gain the maximum amount of profit with the minimum amount of investment. This will ensure the most competitive price and the greatest chance of success in terms of customers and income. Customers will also perceive the product or service as being offered at a fair price. Distribution can occur by a variety of channels.

These channels are influenced by the nature of the business, its size and the product or service being offered. Not all channels will therefore be equally effective for all businesses. Distribution may for example occur by means of intermediaries, as in the case of Xerox above, or directly from the business itself, which also occurs at Xerox in some cases.

On-site, direct sales usually occurs when small businesses are established, and the product or service is sold directly to the customer from the premises of the business. The target consumers are then also located within the immediate vicinity of the business. When target consumers find themselves in a wider geographical area, direct mail is another channel that can be followed. Particular customers are targeted by means of flyers, brochures, etc. In order to sell the product. Orders can then be made via mail. A drawback of this distribution channel is that, while less costly than many other ways of advertising, it may damage the image of the company when poorly targeted.

When a business is huge, like Xerox, it is best to seek partners or other intermediaries for the purpose of product distribution. These intermediaries have to be chosen with great care, in order to provide the best benefit for the business involved. In this, Xerox appeared to have made a wise decision, by choosing an existing and trusted partner. The partner in turn has chosen an implicitly trusted distributor, thereby providing Xerox with the greatest possible benefit.

Other distribution channels include telemarketing, the Internet, agents, wholesalers and retailers. Telemarketing and the Internet as useful tools to reach wider audiences when a business begins to grow and the customer base becomes larger. The Internet is especially useful, as it reaches wider audiences, and purchasing is made simpler by means of this.