Benefits of Distribution Network

Study Notes

Place Utility: The availability of a product in a convenient location for customers, making it accessible and reachable from the producer's place to the place of consumption.
- Example: Marico's route optimization system increased its direct distribution reach by 20% with the same number of salespeople.
Time Utility: The availability of a product when desired by a customer, providing products in advance and storing them in the distribution channel until demand arises.
- Example: P&G's dynamic delivery tool reduced delivery time by up to 20%, cutting costs and carbon footprint.
Form Utility: Providing products in a form that can be made available to consumers, such as grading, packaging, and converting products for channel members.
Information Utility: Providing answers to customers' questions and communicating product features and benefits, with retailers having firsthand information about customer feedback and problems.

Operated its own delivery network without relying on intermediary warehouses and supply chain entities.
Cut out distributors and wholesalers, who consumed 20% or less of the margins.
Uses artificial intelligence (AI) and machine learning (ML) based predictive techniques to forecast demand.
Ensures the necessary paint products are supplied directly to the retail store, reducing reliance on intermediary wholesale retailers.

Has a direct-to-store distribution model, reducing the need for many warehouses.
Inventory is stored at its 330 locations across Indian cities, where customers can pick it up.
Inventory turnover is optimal, lowering storage costs.

Segmented the market into three consumer segments:
- Consumers with a positive attitude to the Coke brand and 100% loyal to Coke.
- Consumers with a positive attitude to the Pepsi brand and 100% loyal to Pepsi.
- Consumers with a positive attitude to both Coke and Pepsi, switching purchases between the two brands.
Focused on the switching segment, which was responsive to sales promotions, advertising, and personal factors.

A call to action should be included in advertising to elicit an immediate response from the consumer.
Netflix uses persuasive text to encourage customers to sign up for a free trial, emphasizing convenience and value.
Limited-time offers are used to create a sense of urgency.
Primary (field) research involves conducting research oneself, such as running focus groups or conducting surveys.
Secondary (desk) research involves using research carried out by others.
Focus groups can provide insights and natural conversation, but may be skewed by the discussion and presence of the researcher.
Surveys can provide structured data, but may be limited by rigid questions and lack of tangents.