Optimizing the Distribution Strategy in US

Airida Barusaite

Student thesis: Master thesis

Abstract

Executive Summary: All marketing decisions are important in bringing the products to the market, but the distribution is considered as the most influential. Any company can easily make changes in their pricing strategy, create new sales promotion campaigns, advertising, modify their product portfolio, but if the distribution channels are set up every company will find it difficult to transform it. This master thesis was conducted in collaboration with German sporting goods company adidas, analyzing one of their business units called adidas by Stella McCartney. The analysis is focused on B2B level, and the goals of the study were: firstly, to give a detailed analysis of the US apparel and sportswear market and the distribution structure overview; secondly, to investigate distribution strategy of the company; lastly, to recommend the best suitable and effective distribution channel mix. The well-known frameworks of PESTLE and Porter’s Five Forces were used to investigate the US apparel and sportswear market. US is seen as a very aggressive sports market with a deep sports culture starting from the school kid. It is also very technology and innovation driven market. The market is identified as very competitive because of the new entrants, competition, substitutes, suppliers and buyers. The distribution of apparel is very fragmented and divided into different levels. In the analysis of the distribution channels, it is revealed that the women consumer is less shopping in sporting goods stores, and the main channels used for apparel shopping is department and chain stores, specialties and eCommerce. By utilizing the Marketing Mix and Distribution Strategy model was exposed that the company’s distribution strategy is well established with a distinctive global positioning strategy, nevertheless, the strategy has to be adjusted to the specific US needs. The company is suggested to flourish their own retail channel through opening flagship stores or women only stores with a more feminine and pleasant atmosphere and a strong brand exposure. In the retail channel the brand should expand into premium department stores as it is the main place for shopping premium apparel. The fundamental point is the emphasis on the eCommerce business, which should be utilized in the own retail channel as well as other retailers’ online stores. In all of these, emphasis should be kept on the customer service, pleasant shopping experience and premium atmosphere.

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2013
Number of pages120