{"id":362,"date":"2015-08-31T23:06:21","date_gmt":"2015-08-31T23:06:21","guid":{"rendered":"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/?post_type=chapter&p=362"},"modified":"2024-05-15T15:42:30","modified_gmt":"2024-05-15T15:42:30","slug":"outcome-using-channels-of-distribution","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/waymakerintromarketingxmasterfall2016\/chapter\/outcome-using-channels-of-distribution\/","title":{"raw":"Outcome: Using Channels of Distribution","rendered":"Outcome: Using Channels of Distribution"},"content":{"raw":"

What you'll learn to do:\u00a0explain\u00a0what channels of distribution are and why organizations use them<\/h2>\r\nMonster Energy drink is a dominant player in the growing market for drinks enhanced with stimulants to\u00a0give consumers extra energy. Monster\u00a0promises to deliver \"a big, bad buzz.\" The company sponsors the X Games and a broad range of high-adrenaline sports. The company boasts that it puts\u00a0all its marketing dollars into\u00a0supporting the scenes that energy-drink buyers love.\u00a0In 2014, the company found itself closing in on Red Bull, the market leader that launched the original energy drink in 1997.[footnote]Mitchell, Dan. \u201cMonster, Red Bull, Rockstar Ranked.\u201d Time. Time, May 11, 2015. https:\/\/time.com\/3854658\/these-are-the-top-5-energy-drinks\/<\/a>.[\/footnote]\r\n\r\n[caption id=\"attachment_6340\" align=\"aligncenter\" width=\"579\"]\"Energy Figure 1. Energy Drink Market Share in 2014[\/caption]\r\n\r\nIn deciding\u00a0how to best capture the top position in the market, Monster forged an important strategic partnership with Coca-Cola. The press release that announced this partnership stressed the benefit to Monster of Coca-Cola's global distribution network\u2014the most powerful\u00a0distribution network in the global beverage industry:\r\n
The Coca-Cola Company and Monster Beverage Corporation announced today that they have entered into definitive agreements for a long-term strategic partnership that is expected to accelerate growth for both companies in the fast-growing, global energy-drink category. \u00a0The new, innovative partnership leverages the respective strengths of the Coca-Cola Company and Monster to create compelling value for both companies and their share owners.\r\n\r\nImportantly, the partnership strategically aligns both companies for the long-term by combining the strength of the Coca-Cola Company\u2019s worldwide bottling system with Monster\u2019s dedicated focus and expertise as a leading energy player globally.[footnote]The Coca-Cola Company. \u201cThe Coca-Cola Company and Monster Beverage Corporation Enter into Long-Term Strategic Partnership.\u201d The Coca-Cola Company, August 14, 2014. https:\/\/web.archive.org\/web\/20181221193452\/https:\/\/www.coca-colacompany.com\/press-center\/press-releases\/the-coca-cola-company-and-monster-beverage-corporation-enter-into-long-term-strategic-partnership.[\/footnote]<\/blockquote>\r\nThe terms of the agreement also included Coca-Cola transferring all of its energy drinks to Monster, and Monster transferring all of its non-energy beverages to Coca-Cola, with\u00a0Coca-Cola purchasing 16.7 percent of Monster Beverage Corporation.\r\n\r\nBetween June 2014 and December 2015, Monster Beverage Company's stock price rose by 115 percent. The company has clearly benefited from access to Coca-Cola's distribution infrastructure, and will continue to do so. However, it still lags behind Red Bull, which has the largest market share.\r\n\r\n[caption id=\"attachment_8130\" align=\"aligncenter\" width=\"750\"]\"Energy Figure 2. Energy Drink Market Share in 2019.[\/caption]\r\n\r\nThis example illustrates the power of distribution channels<\/em>, which we've been calling \"place\" in the four Ps. Up next, you'll learn what these are and why companies use them.\r\n

Learning Activities<\/h3>\r\n