The Relationship Between Distribution Network And Market Share

Abstract

The inter-relationships between distribution network and market share has been the subject of extensive investigation in the marketing models literature, especially for fast-moving consumer goods. The studies of Farris et al (1989), Verbeke et al (1994), Cadeaux and Tan (2004), and Wilbur and Farris (2007) have provided several insights into the distribution-market share relationship for several different product classes. The objective of the present study is to mathematically model the relationship between the distribution network and market share of a class of cardio-vascular pharmaceutical drugs. The proposed model expresses distribution as a function of market share, as the products in question are largely subject to a “pull” effect. The model empirically assesses the “pull” and “push” effects for the given class of products, and allows distribution planning for the same.