Channels of Distribution: McDonald's.

Essay by rhaskellUniversity, Bachelor'sA, October 2005

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Introduction.

The core of this presentation is to discuss the theory of distribution strategy with the underlying real life examples of McDonald's fast-food restaurants. The aim is to discuss McDonald's distribution channel and the way in which this fast-food restaurant chain gets its products to the market. In the theory of the Marketing Mix, place (distribution) determines where the product will be sold and how it will get there. In fact, as noted on www.mcdonalds.com, McDonald's is the leading global foodservice retailer, with more than 30,000 local restaurants serving nearly 46 million people each day in 121 different countries. Approximately 80 percent of all McDonald's restaurants worldwide are owned and operated by independent franchisers. Furthermore, at the essence of place decisions, Kotler (et al., 2001, p. 513) claims that, "retailers, particularly fast foods chains, often state their seven P's of marketing to be, that is location, location, location, location, location, location and location."

Hence, a retailer's location is the key to attracting customers. The costs of the building or leasing facilities are a major factor on the retailer's profits. Thus, site location decisions are among the most important the retailer make" (Kotler, et al., 2001, p. 513).

Intensive Distribution.

Distribution arrangements tend to be long term in nature. Because of this time horizon, channel decisions are usually classed as strategic, rather than tactical or operational ones. Many of McDonalds restaurants are open 24 hours per day which satisfies the customers needs and wants, especially for exists their hunger. This kind of distribution strategy is called "intensive distribution", means marking the product available for sale through all possible channels of distribution. As defined by Kotler (et al., 2001, p. 487), "intensive distribution is stocking the product in as many outlets as possible." In addition, this strategy must be designed to reach...