The Heineken Marketing Dispute Over Product Cost Essay - 2

The Heineken Marketing Dispute Over Product Cost - Essay Example Heineken refused to supply Forty Foot, a newly owned pub of Wetherspoon’s. Heineken could lose a lot of profits if it ends its relationship with the pub chains of Ireland. Wetherspoon’s chain is well known for selling food and drinks at cheap prices in the UK. It’s an entry into the Irish market would mean that competition would increase and prices would be driven down; Heineken is not happy with this, so it has demanded its distributors in Ireland including Wetherspoon’s and Dublin to sell its products at high prices (Pogatchnik 2014). Wetherspoon’s has a plan of opening 30 pubs in Ireland by buying failed businesses in the country as an entry strategy. This article is relevant to the concept of marketing channels. The types of marketing channels are direct selling, selling through intermediaries, dual distribution, and reverse channels. The method used by Heineken in this article is the dual distribution mechanism whereby the company uses more than one channel simultaneously in the same market. For example, Heineken sells to Whetherspoon’s and Duplin at the same time to reach the market of Ireland. The concept of marketing channels suggests that the dual distribution channel may cause conflict among channels (Venugopal 2001, p.67). This is what happened with Heineken as some of its distributors rejected its products. The company also utilizes intermediaries and agents to sell its products which involve Manufacturer-Agent-Wholesaler-Retailer-Consumer. This marketing channel is used to reach the market indirectly to target markets (Venugopal 2001, p.130). For example, Heineken sells to the market through pubs such as Duplin and Whetherspoon’s which in turn sell to retailers or sell directly to consumers.