Logistics and Distribution Methods

Play an AI-generated podcast conversation about this lesson

is the term used to describe the method and means by which a product or a group of products are physically transferred, or distributed, from their point of production to the point at which they are made available to the final customer.

Physical distribution

the end point is, generally, a retail outlet but, increasingly, it may also be the customer's house, because some channels bypass the shop and go direct to the consumer •for some products, such as music, films, etc., the physical product can be transferred via the internet.

FOR CONSUMER PRODUCTS

• the physical channel is likely to be from a manufacturer/supplier to an end point, which is likely to be a factory.

FOR INDUSTRIAL PRODUCTS

WHAT IS A DISTRIBUTION CHANNEL?

the path or route decided by the company to deliver its good or service to the customers. The route can be as short as a direct interaction between the company and the customer or can include several interconnected intermediaries like wholesalers. distributors. retailers. etc. • can also be referred to as a set of interdependent intermediaries that help make a product available to the end customer. Signup and view all the answers

IMPORTANCE OF DISTRIBUTION CYCLE

Product's availability • Ease of access • Maximize your revenue • Brand awareness Signup and view all the answers

FUNCTIONS OF DISTRIBUTION CHANNELS

Distribution channels provide time, place, and ownership utility. They make the product available when, where, and in which quantities the customer wants. •Logistics and Physical Distribution: Marketing channels are responsible for assembly, storage, sorting, and transportation of goods from manufacturers to customers. Signup and view all the answers

FUNCTIONS OF DISTRIBUTION CHANNELS

Facilitation: Channels of distribution even provide pre-sale and post-purchase services like financing, maintenance, information dissemination and channel coordination. • Creating Efficiencies: This is done in two ways: bulk breaking and creating assortments. Wholesalers and retailers purchase large quantities of goods from manufacturers but break the bulk by selling few at a time to many other channels or customers. They also offer different types of products at a single place which is a huge benefit to customers as they don't have to visit different retailers for different products. Signup and view all the answers

FUNCTIONS OF DISTRIBUTION CHANNELS

• Sharing Risks: Since most of the channels buy the products beforehand, they also share the risk with the manufacturers and do everything possible to sell it. • Marketing: Distribution channels are also called marketing channels because they are among the core touch points where many marketing strategies are executed. They are in direct contact with the end customers and help the manufacturers in propagating the brand message and product benefits and other benefits to the customers. Signup and view all the answers

TYPES OF DISTRIBUTION CHANNELS

• direct channel • indirect channels Signup and view all the answers

• one of the oldest forms of selling products. • It doesn't involve the inclusion of an intermediary and the manufacturer gets in direct contact with the customer at the point of sale. • Some examples of direct channels are peddling, brand retail stores, taking orders on the company's website, etc. a an de hae tnget tdiane e gaugip hcaly Etcamentad For cneipie, Ptct.

Direct Channel or Zero-level Channel (Manufacturer to Customer) Signup and view all the answers

When a manufacturer involves a middleman/intermediary to sell its product to the end customer, • Indirect channels can be classified into three types.

Indirect Channels (Selling Through Intermediaries) Signup and view all the answers

Retailers buy the product from the manufacturer and then sell it to the customers. dealing in shopping goods like clothes, shoes, furniture, toys, etc.

One-level Channel (Manufacturer to Retailer to Customer) Signup and view all the answers

Wholesalers buy the bulk from the manufacturers, breaks it down into small packages and sells them to retailers who eventually sell it to the end customers. • Goods which are durable, standardized and somewhat inexpensive and whose target audience isn't limited to a confined area use two-level channel of distribution.

Two-Level Channel (Manufacturer to Wholesaler to Retailer to Customer) Signup and view all the answers

Involves an agent besides the wholesaler and retailer who assists in selling goods. These agents come handy when goods need to move quickly into the market soon after the order is placed. spread all over the country and the demand of the product is very high.

Three-Level Channel (Manufacturer to Agent to Wholesaler to Retailer to Customer) Signup and view all the answers

Categories of agents

Super stockiest buy the stock from manufacturers and sell them to wholesalers and retailers of their area • Carrying and forwarding agents work on a commission basis and provide their warehouses and shipment expertise for order processing and last mile deliveries Signup and view all the answers

When a manufacturer uses more than one marketing channel simultaneously to reach the end user, he is said to be using the dual distribution strategy. • They may open their own showrooms to sell the product directly while at the same time use internet marketplaces and other retailers to attract more customers. • A perfect example of goods sold through dual distribution is smartphones.

DUAL DISTRIBUTION Signup and view all the answers

DISTRIBUTION CHANNELS FOR SERVICES

Unlike tangible goods, services can't be stored. But this doesn't mean that all the services are always delivered using the direct channels. • With the advent of the internet, online marketplaces, the aggregator business model, and the on-demand business model, even services now use intermediaries to reach to the final customers. Signup and view all the answers

Logistics and Distribution Methods

Choose a study mode

Podcast

Questions and Answers

is the term used to describe the method and means by which a product or a group of products are physically transferred, or distributed, from their point of production to the point at which they are made available to the final customer.

the end point is, generally, a retail outlet but, increasingly, it may also be the customer's house, because some channels bypass the shop and go direct to the consumer •for some products, such as music, films, etc., the physical product can be transferred via the internet.

• the physical channel is likely to be from a manufacturer/supplier to an end point, which is likely to be a factory.

WHAT IS A DISTRIBUTION CHANNEL?

IMPORTANCE OF DISTRIBUTION CYCLE

FUNCTIONS OF DISTRIBUTION CHANNELS

FUNCTIONS OF DISTRIBUTION CHANNELS

FUNCTIONS OF DISTRIBUTION CHANNELS

TYPES OF DISTRIBUTION CHANNELS

When a manufacturer involves a middleman/intermediary to sell its product to the end customer, • Indirect channels can be classified into three types.

Retailers buy the product from the manufacturer and then sell it to the customers. dealing in shopping goods like clothes, shoes, furniture, toys, etc.

Involves an agent besides the wholesaler and retailer who assists in selling goods. These agents come handy when goods need to move quickly into the market soon after the order is placed. spread all over the country and the demand of the product is very high.

Categories of agents

DISTRIBUTION CHANNELS FOR SERVICES

More Like This

Logistics Distribution Network Nodes

Physical Distribution and Logistics

Logistics Lesson 6: Channels of Distribution

Logistics Tradeoffs in Distribution

Upgrade to continue