Efficient Distribution Systems: Delivering Products to Customers Effectively

Place/Distribution Crucial to getting the product to the customer Efficient distribution system needed Most products are distributed by different companies who are selling them For example the textbook we use is passes though, authors, publishers, printers, wholesalers and retailers before it gets to us, the customers

Traditional Distribution Channels Product to customer no intermediaries Producer to retailer to customer Retailer is an intermediary who sells to the customer, used for perishable items e.g. fruits or furniture Producer to wholesaler to retailer most common method, used for distribution or consumer goods, wholesaler buys in bulk, from a producer, then resells in smaller quantities to retailers Product to agent to wholesaler to retailer to customeragents distribute products but never own them, paid a commission by the producer, used for inexpensive, frequently used products, a business that doesn’t have sale representation will often use an agent

Non-Store Retailing A retailing activity conducted away from the traditional store Methods Door to door selling Mail-order catalogues Party-plan merchandising Vending machines Telemarketing Internet marketing Internet marketing has become popular as customers can order products that can be delivered directly

Examples 'But wait, if you ring this line in the next 15 minutes, we'll throw in a set of steak knives absolutely free‘ (Telemarketing) ’Would you like to do a 30 day trial on our skincare product?’ (Telemarketing) (Internet Marketing

Channel Choice How a business chooses the channel of distribution best suited to its product depends largely on the location of the business's market or market coverage Market coverage refers to the number of outlets a firm chooses for its product business can decide to cover the market in one of the three ways as follows, the difference being the intensity of coverage Intensive Distribution occurs when the business wishes to saturate the market with its product Selective Distribution involves using only a moderate proportion of all possible outlets Exclusive Distribution only used for one retail outlet for a product in a large geographic area

Physical Distribution Issues Is all those activities concerned with the efficient movement of the products from the producer to the customer It is therefore the movement of the products themselves through their channels of distribution Includes the functions of transportation, warehousing and inventory control Electronic post and parcel delivery channels will be used more extensively to meet the increasing demand

Transport An intricate network of transportation is required to deliver the vast array of products on supermarket shelves The method of transportation a business uses will largely depend on the type of product and the degree of service the business wishes to provide. The most common methods include: rail, road, sea,and air

Warehouse/Inventory A warehouse is a central meeting point for products They are used for receiving, storing and dispatching goods Inventory is the amount of stock they have in storage and in their retail shop If a business carries too much stock it an cause for the business to have to pay high storage fees If the business doesn’t have enough stock and is always ‘out of stock’ it causes in having ‘stock-out costs’ or loss of sales The goal of inventory is to have a good inventory control system which balances their stock to not have too much stock and not too have too little stock

Short Answer Questions Define the term ‘Place’ Create 3 examples of telemarketing

Efficient Distribution Systems: Delivering Products to Customers Effectively

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