HYBRID DISTRIBUTION SYSTEM STRATEGIC METHODS APPLIED MORE AND MORE IN THE CONTEXT OF NEW MARKETS EXTENDED THROUGH

H THE EUROPEAN UNION

Tecu Alina Simona, Transilvania University of Braov, Tmpei street no. 12, staircase C, ap.1, Braov, tel. no. 0722 730 891, email: alina_tecau@yahoo.com Chiu Ioana Bianca, Transilvania University of Braov, Prundului street no. 37, Braov, tel. no. 0740 050 894, e-mail: ioana.chitu@unitbv.ro

The fundamental framework of the market relations drawn by the Romanian adherence to E.U. implies new approaches in distribution systems establishment and administration. As a consequence it is to be noticed the need of every economical organization to grant special credit to the management of personal distributional systems projection and coordination process. At the point of extension upon new markets through the European Union, in order to handle the requirements of divers and of the each time more selective public, quite seldom, the companies decide adopting multiple or hybrid distributional channels.

Key words: hybrid distribution channels, dual distribution, extension on new markets, vertical integration. Managerial options of a company regarding the palpable configuration of distributional systems structure at the point of extension on a new European Unions market, consider the existent and previewed situation of that very market. There is effectuated an analysis on the factors that influence the extension process of the company on new markets, such as: medium dynamics, degree of diversification of the organizations business, communication possibilities and coordination of companys activities in the context of each countrys existent terms, etc. In the trial of solving as many complex problems as possible, issues appeared during the distributional process, creating new distribution organization systems such as the vertical distribution system, the equal system and the multiple channels distributional system.

Concepts clarifying of hybrid distributional systems

Hybrid distributional systems are characterized by the existence of multiple distributional channel systems, belonging to the same entity and created to deliver merchandise to one or several market segments. At the beginning of the substantiation researches concerning this kind of distribution management, they were called dual channels but, in the recent years, these channels were analyzed under the name of hybrid channels (Stern 1996; Moriarty and Moran, 1990), multiple channels (Anderson et al., 1997; Cespedes and Corey, 1990), plural governing systems (Heide, 1994; Bradach and Eccles, 1989; Bradach, 1997; Dahlstrom and Nygaard, 1999), and tapered integration (Harrigan, 1984). Professor Niels Peter Mols, from University of Aarhus, Denmark, in his article entitled Medium factors affecting the dual channels implementation uses an incursion in the specialized literature dedicated to theories regarding the dual marketing channels and suggests a survey model, which would explain the factors that influence the implementation of dual marketing channels. The model suggests the existence of dual marketing channels made by competitors, due to technology, consumers, implementation. According to Professor Niels Peter Mols researches, we are talking about dual marketing channels from the point where producers sell their products through several methods: both through mediators, directly to consumers and users through personal effort. These are to be met in a variety of areas and take different formats (Preston and Schramm, 1965). Moriarty and Moran (1990) observe that here are clues testifying the development of dual marketing channels into dominating mechanisms in the 90s and that many companies are using nowadays for simultaneous sells both in integrated and nonintegrated distributional channels, as many authors specify for instance: Bradach, 1995, 1997; Brickley and Dark, 1987; Caves and Murphy, 1976;Hunt,

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1973; John and Weitz, 1988; Lafontaine, 1992; Moriarty and Moran, 1990; Stassen and Mittelstaedt, 1995; Preston and Schramm, 1965. In terms of an empiric research, many studies inspired from the franchise systems were both units from the personal system and from the franchised, used at the same time (Oxenfeldt and Kelly, 1968-1969). Still, nowadays, many of the dual channels dont include a franchise and, for the future, it is considered that this kind of dual channels will be widespread as more and more companies combine the classic marketing channels, with new distributional channels such as those through the Internet. Mainly industry, but also the banking district, mass-media, music where a considerable part of the production could have a digital format, the new electronic distributional channels are combined with the traditional channels resulting in fundamental changes in the structure of marketing channels. In spite of their importance, there are still lacking the empiric studies on the factors affecting the implementation of dual marketing channels. The existent theories on the dual distributional channels apply different starting points. Oxenfeldt and Kelly (1968-1969), Caves and Murphy (1976) and Minkler (1992) have based their speculations on the organization theory and especially on the organizations life cycle. Agency theory was also a common starting point for studies on dual franchise system types (Rubin, 1978; Brickley and Dark, 1987; Martin, 1988; Norton, 1988; Brickley et al., 1991; Carney and Gedajlovic, 1991; Lafontaine, 1992; Gallini and Lutz, 1992; Shane, 1996, 1998; Shepard, 1993). The theory of transaction cost was interested in the systems ability to fence from opportunism (Dutta et al.; 1995b) and specialty literature in this area mainly focused on compassing the market and the conflicts that may have arisen within the channels (e.g. Moriarty and Moran, 1990; Webb and Didow, 1997).

Methods of bringing forth hybrid distributional channels

Some methods of applying some hybrid distributional channels of a sole producer, addressing to certain distinct markets, are reunited in the below diagram (fig.no.1), forming altogether a hybrid distributional system which completes the assurance of optimal usage of the resources for the benefit of the company and of the altogether disserved markets. The analysis of the constituents associated in the below diagram proves the existence of four distinct channels. The first two are created in order to satisfy the needs of two segments of final consumers: the first one is short and implies specific methods of the direct marketing and the second one is a long channel including retailers. The two latter channels are created so as to serve two segments of organizational customers but we must also match this time with a short channel, which uses selling power with a long one including two mediating links. Catalogues, phone

First consumers segment Second consumers segment

Retailer

Producer Distributor
Selling power Authorized dealers
First companies segment

Second companies segment

Fig.1. Exemple of hybrid distributional channel Sorce: Kotler Ph., Armstrong G., Saunders J., Wong V.: Marketing principles. Teora, Bucharest, 1998, p.975.

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Essentially, by using several distributional channels the companies benefit of many advantages such as: increasing the market penetration degree by using a new channel to reach new clients; attaining lower distributional costs as a result of using more favorable channels (selling on telephones in comparison to home selling through especially trained staff); the possibility of sells personalizing towards companies at the extent of using highly qualified sells staff for vending complex equipments. It could, therefore, be claimed that the nowadays implied distributional systems by economical factors present a dynamic complexion which program the necessity of a permanent survey of clients needs and of the methods and mechanisms through which the merchandise and personal services marketing could be attained. The decisions are usually taken regarding the existent distributional channels dimensions and the possibility of creating new ones that would be more economic and with a higher impact on considered input markets.

Reasons for implementing certain hybrid distributional systems

The reasons for implementing certain hybrid distributional systems may be classified in the following categories: the existence of some markets that are inaccessible to common distributional channels; the discount of sell products and service costs of a certain already existent but hardly accessible consumers category; the possibility of ensuring the service quality criteria required by all final beneficiary categories. Alongside these reasons we meet the accommodation needs of the distributional channels to the life cycle of the product. Since, as the famous Professor Kotler emphasizes, none of the distributional channels can keep competing all along the whole products life cycle without having to adjust to the existent conditions of each phase. The introducing phase channels deal with market creating process and operate on high prices due to the consumer search and education phase to which they are compared along with those used in the maturity phase of the products when clients are searching for channels offering products with lower added value. Aside of these aspects, there should also be considered the time distributional models that lose their actuality, therefore losing their modernity. The vertical distributional system represents an example of the modern distribution method, emerged as an alternative to the classic methods. For example, the vertical integration in the same organization of several successive levels of the supply-delivery chain was determined by the profit increasing objectives, the discount and adjusts of the reaction time to the market requirements. Nowadays, the vertical corporate integration is no longer considered to be a viable solution in all situations due to the capital investments and to the imposed complex organization structures. It is being replaced by other integration methods such as virtual integration. Along with the increase of consumer categories, numbers and marketing capacities, more and more guilds apply the multiple channel distributional systems. By using the multiple distributional channels, the guilds benefit of three major advantages, meaning: a better market compression; much lower distributional costs; more pronounced process marketing. The growing number of companies deciding to embrace a hybrid distributional system prove, once more, not only the strategic importance of this kind of distributional system but also its potential future, especially due to the mixture of traditional distribution channels along with the new channels based on modern technology promising great advantages for European market consumers.

Bibliography:
1. 2. 3. 4. Blan.C., Logistica funcie integratoare i factor de competitivitate, Ediia a II-a revizuit i adugit, Ed. Uranus, Bucureti, 2004, p. 322 Kotler Ph., Armstrong G., Saunders J., Wong V.: Principiile Marketingului. Teora, Bucureti, 1998, p.975. Lefter C. (coordonator) Marketing , Reprografia Universitii Transilvania din Braov, 2006. Niels P. M.,- Environmental Factors Affecting, the Implementation Of Dual Marketing Channels, Department of Management Afdeling for Virksomhedsledelse, University of Aarhus c Denmark, Issn 1398-6228, 2000 Patriche D., Elemente de economia comerului, Ed Sylvi, Bucureti 2001 Patriche I., Canale de distribuie i logistic, Ed . ProUniversitaria, Bucureti, 2006.

5. 6. 7.6.

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