Logistics & Distribution

Management

Presentation on Distribution Management

System
Team
Name

Roll
No.

Organization

Position Held

Ankit Upadhayay

04

Himani industries Ltd.

Export coordinator

Hitesh Mhapankar

64

Mukund Industries Ltd.

Production supervisor

Nikhil Patil

17

Wadhwa Group

Procurement executive

Rahul Nadoskar

47

Trans-Asia Biomedical.

Commercial executive

Shankar Gawade

21

Maersks India Pvt. Ltd.

Customer support team

Swapnil Juvetkar

41

Mahanagar Gas ltd.

Junior engineer

Ravi Lakhani

50

General Mills India P Ltd.

Production planner
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Distribution Management System

Definition : The
management of the efficient
transfer of goods from the
place of manufacture to the
point of sale or consumption.
Distribution management
encompasses such activities
as warehousing, materials
handling, packaging, stock
control, order processing,
and transportation.

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The Marketing Mix

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The Marketing Mix

Product
A product is anything that can be offered to a market that might
satisfy a want or need in retailing. For e.g. refrigerator , T.V.,
Mobile phone etc.
Place
The place is where you can expect to find your customer and
knowing this place, you have to look for a distribution channel in
order to reach your customer.
Price
Price sometimes refers to the quantity of payment requested by a
seller of goods or services, rather than the eventual payment
amount.
Promotion
Promotion is one of the market mix elements, and a term used
frequently in marketing.
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The Channels of Distribution

The prime of object of production is its consumption. The movement
of product from producer to consumer is an important function of
marketing. It is the obligation of the producer to make goods
available at right place, at right time right price and in right quantity.
The process of making goods available to the consumer needs
effective channel of distribution. Therefore, the path taken by the
goods in its movement is termed as channel of distribution. The
goods may be sent to the consumer directly or indirectly through
middlemen. The channel of distribution may be classified as:
A) Selling through direct channels
B) Selling through indirect channels
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The Channels of Distribution

A) Selling through direct channels
This is the oldest, shorter and the simple channel of distribution. The producer
sells the product directly without involvement of any middle man. The sale can be
made door to door through salesman, retail stores and direct mail. Certain
industrial and consumer goods such as clothes, shoes, books, hosiery goods,
cosmetics, household appliances, electronic goods etc., may be sold through direct
contact. Perishable goods such as vegetable and fruits can also be sold directly.
Advantage of selling through direct channels
It is simple and fast.
It is economical.
Disadvantages of selling through direct channels
Non-availability of expert services of middle man.
Large investment is required.

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The Channels of Distribution

B) Selling through indirect channel
According to this method of indirect selling, product is passed on to the customers through
intermediaries, known as wholesalers, retailers and agents. These channels may be as under:

1. Producers -> Wholesalers -> Retailers -> Customer Two level Channel: It is commonly
used channel of distribution. It is also known as traditional or normal channel of distribution. This
channel is useful for small producers for small means. The channel is used for consumer goods. The
common practice is that the manufacturer sells goods in large quantity to wholesalers, who sell
goods to retailers in small quantity. Finally goods are sold to customers in pieces.

2. Producer -> Agent -> Retailer -> Consumer or Two level Channel: The common practice
in this two level channel is that the goods are sold to the agent in bulk. The agent sells goods to
retailer, who sells goods to customers in pieces. This channel is suitable where the retailers are few
and geographically centered. This channel is commonly used in textile, machinery, equipment and
agricultural products.

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The Channels of Distribution

3. Producer -> Agent -> Wholesaler -> Retailer -> Customer or Three
level Channel: The common practice in this three level channel is that goods are
sold by the producer to the agent, who sells it to the wholesaler, who sells to the
retailers who finally sells goods to customers. This is the longest channel of
distribution. This practice is useful, when the producer wants to the relieved of the
problem of distribution. This channel is popularly used in textile.
4) Producer -> Retailer -> Customer or one level Channel: Under this
channel the producer sells goods to retailers, who sell the goods to customers.
This channel is popular with the departmental stores, chain stores and
supermarkets etc., because these are large scale retailers. Generally readymade
garments, shoes home appliances and automobiles are sold through this channel.

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Patterns of Distribution

Patterns of Distribution decides the intensity of the distribution

& also decides the service level provided.
Types of Distribution intensities:
1) Intensive
2) Selective
3) Exclusive

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Patterns of Distribution
Intensive Distribution : is done through every reasonable outlet available FMCG
Strategy is to make sure that, the product is available in as many outlets as
possible.
Preferred for Consumer, Pharmaceuticals & automobile spare.
Selective Distribution: Multiple but not all outlets in the market
Only a few selected outlets are allowed to keep the product
Outlets selected in line with the image of the company wants to project.
Preferred for High Value items like Jewelers
Exclusive Distribution: Highly selective choice of outlets, may be only one
in the whole market.
Could include outlets set up by the company itself (Bata)

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Channel Formats

Channel format is basically decided by who Drives the market

1) Producer Driven
2) Seller Driven
3) Service Driven
4) Others

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Channel Formats

Producer Driven format:

This is the effort of the producer / manufacturer to reach the
product to his consumers
Examples:
Company owned retail outlets (Bata, Petrol Pump)
Licensed Outlets (MC Donald's)
Franchisees
Brokers
Vending Machines
Company contracted Distributors
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Channel Formats

Seller Driven:
This is where producer / manufacturer uses existing channels to
reach large number of end users.
Examples:
Existing wholesalers and Retailers
Modern Retail formats
Specialty shops (Shoppers stop)
Discount stores (D Mart)
Local pheriwalas
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Channel Formats

Service Driven
These are the people who facilitate the distribution
Examples:
Transport & Freight forwarders
Warehouse space provider
C&F Agents
3P Logistics provider
Couriers
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Channel Formats

Others include
Multi level marketing systems
Cooperative societies
TV Home shopping
Catalogue marketing
Internet
Exhibitions / fares / Trade shows
Database marketing

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Channel Formats

Multi channel Distribution:

Used in situation where there are same products but different market
segments, unrelated products in same markets, size of buyer varies &
reach is difficult.
Company uses different channels to reach same / different market
segment.
FMCGs have separate network for retail markets & institutions
Pharmacy companies may use different channels to reach Doctors,
Chemists & Hospitals
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Thanks for your Attention

Any question / Feedback

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