UNIT IV

DISTRIBUTION AND PROMOTION

Physical distribution
Physical distribution is defined as the process of physical movement of goods from
the producer to the consumer. It is an important marketing function which describes
marketing activities that involves flow of raw materials from the suppliers to the factories for
production and also the movement of finished goods from production to the final user.

Objectives of Physical Distribution

The following are the objectives of physical distribution
1. Consumer satisfaction
2. Profit Maximisation
3. To ensure the availability of right goods at the right quantity at the right time and the right
place with the least cost for the service.
4. To achieve speedier transportation of goods and maintaining minimum inventory level.
5. To establish the correct price of products by effective management of physical activities of
distribution.
6. To achieve competitive advantage over the competitors by providing the best customer
service.

Components of Physical Distribution

Following are the components of physical distribution
1. Order Processing: Order processing is the first point or in other words, the starting point
of the distribution activity. The functions involved in order processing are receiving order,
handling the received order, granting of credit for the item ordered, generating invoice,
dispatching of order and collecting the bills.
2. Storage and Warehousing: Storage deals with the storing of goods in proper condition till
the time it is ordered by the customer. Goods that cannot be generally made available
throughout the year need to be stored.
3. Inventory Control: Inventory control refers to the process of efficient control of goods
that are stored in the warehouses. Businesses need to maintain adequate levels of inventory in
order to ensure uninterrupted fulfillment of orders.
4. Material Handling: Material handling refers to the activities that are associated with the
movement of goods from the site of manufacturing till it is loaded to the transport.
Proper material handling results in minimising the wastage of goods during transport, reduces
unnecessary movement of goods, facilitates quick order processing and efficient goods
movement.
5. Transportation: Transportation is a very essential component of physical distribution
which plays a crucial role in movement of the stored goods from warehouse to the customers.
The process of transporting involves loading and unloading of goods and their movement
from one place to another.

Marketing Channels
A marketing channel is the type of medium used to advertise your company. Learn
how to choose the right marketing channel for your business here. Digital marketing channels
have been around since the earliest days of the Internet, but the marketing channel definition
has changed with the times.
Types of marketing channels
Digital advertisements
Digital advertisements enable you to use images, audio, and video marketing to communicate
your message, market products, and reinforce your brand presence online. Display ads appear
on websites, email platforms, social media posts, and many other digital channels, usually in
the form of a banner, like the digital advertisement for AT&T we mentioned earlier.

Digital display advertising doesn't target keywords. It isn't limited to search engine results.
There are many more pages for digital advertising on websites than there are for search ads
on search engine results.

One of the advantages of display advertising is its capacity for tracking. If someone clicks on
your display ad to go to your website and then doesn't convert, you can track them with a
cookie. You can use this information to target your market with a more effective ad later.
When you achieve contextual relevance with your ads, digital advertising becomes extremely
cost-effective.

Email
Email marketing isn't exactly the most modern technology available to digital marketers, but
it is familiar, measurable, and well-understood.

Email marketing also allows you to take advantage of some of the latest tools of content
marketing, such as automation and personalization while staying within your marketing
budget.
Events
If you want to set your brand apart, you can't spend all your time building a digital presence.
You occasionally need to meet your target audience face-to-face. Product reveals, brand
reveals, client conventions, trade shows, and expos are all opportunities to exercise your sales
skills in person.

Event marketing is a strategy for promotion that involves in-person contact between the
people behind the brands, their influencers, and their customers. Every event is a little
different. It is always necessary to provide at least slightly different content for different
audiences, taking into consideration local culture.
Influencer marketing
Influencer marketing has emerged as an alternative way of reaching consumers who have
grown tired of other forms of advertising.

Social influencers blog about their lives and their experiences with the brands that sponsor
them. The job of a social influencer is to establish online relationships. A by product of those
social media relationships is interest in sponsored products.

Influencer marketing is relational, not transactional. You are building relationships with your
brand, not sales of your products. But over time, you will get new customers who want to try
out your products that social influencers mention online.

Search engine optimization (SEO)

SEO is a fundamental tool of multichannel marketing. SEO is all about making sure that your
content is recognized by the search engines, namely, Google.

Google insists that the most important element of good SEO is useful content. If you are
providing the content searchers are looking for, Google will reward you with high rankings,
at least in theory. There are no magic algorithms that guarantee that your pages will rank in
the top of the search results. but Mailchimp offers online instruction in SEO that will show
you how to use headers, meta descriptions, and other tools of on-page SEO to boost your
rankings in Google search.

Content marketing
Digital marketers around the world rank content marketing as their most useful tool in the
day to day marketing efforts. The research service Statista reports that marketers are four
times to list content marketing as their most effective marketing tool as social media, and
three times more likely to prefer content marketing to improved U/X.

Content marketing can keep customers coming back to your site to learn more. They will not
necessarily make a purchase every time they visit your site, but every visit reinforces your
brand and makes your products the first choice for consumer needs.

Word-of-mouth
Word-of-mouth advertising is the natural outgrowth of great value and exceptional service. If
you delight your customers, they will tell their friends. Word-of-mouth is free, and the benefit
to your brand can be priceless.

Traditional marketing
Traditional marketing channels include direct marketing like television, radio, billboards,
signs, and print. Traditional marketing still works for reaching enormous numbers of people
at the same time. But you need to consider the cost of traditional marketing versus its
potential benefits to avoid overspending.
Distribution Logistics
Distribution logistics is a vital component of the broader logistics system, focusing on
the production and market aspects. Specifically for direct-to-consumer brands (DTC),
distribution logistics plays a crucial role in seamlessly delivering finished goods from
manufacturers or suppliers directly to retailers, distribution centres, and customers, ensuring a
smooth fulfillment process.

Factors Logistics Distribution Logistics

The process of managing the flow The subset of logistics that focuses on the
Definition and storage of goods, services, movement and management of goods from
and information production to end customers

Focuses on the distribution phase of the

Scope Covers the entire supply chain
supply chain

Efficient flow and storage of Smooth movement of goods from

Objective
goods production to end customers

Procurement, transportation, Order processing, inventory control,

Activities
inventory, etc. packaging, transportation

Movement and management of goods in

Focus Overall supply chain operations
the distribution network

Main Optimising supply chain Meeting customer demands and enhancing

Goal operations operational efficiency

End customers, retailers, or distribution

End Point Point of consumption
centres

Cost minimisation, customer

Emphasis Efficient distribution, timely delivery
satisfaction

Primary Objectives of Distribution Logistics

The primary mission of distribution logistics is to balance the supply of goods in the
market according to market demand.
The main objectives of distribution logistics are:
Availability of Goods
Ensuring a sufficient quantity of products is available is the primary
objective of distribution logistics management. It aims to maintain optimal stock levels and
timely replenishment to meet customer demand.
Cost Optimisation
Distribution logistics aims to reduce transportation, storage, product
availability, and order processing costs. By optimising these costs, companies can achieve
more structured, faster, time-efficient, and sustainable delivery.
Delivery Performance Optimisation
Providing on-time delivery to customers is crucial for building long-lasting and
sustainable customer relationships. Distribution logistics focuses on proper planning and
implementation to optimise delivery performance and meet customer expectations.
Efficient Information Flow
Effective logistics management relies on a transparent and efficient communication
network. Distribution logistics aims to strengthen the flow of information within the business,
allowing for better agility and responsiveness to market demands.
By pursuing these objectives, companies can enhance their distribution logistics operations,
improve customer satisfaction, and gain a competitive edge in the market.
Distribution Problems
Here are some of the unique and notable challenges that distributors are currently facing:
1. Disintermediation
2. Increased Competition and Customer Demands
3. Selling Channels
4. Aligning Sales with Backend Systems
5. Lack of Adequate Technology
6. Global Operations
7. Relationship Management/Customer Service
8. Reporting
Disintermediation
In recent years, more manufacturers have chosen to sell directly to retailers or
customers, thus eliminating the need for an intermediary or middleman. By selling directly to
consumers, manufacturers can earn more revenue, especially through the use of eCommerce
which has contributed to helping manufacturers sell directly.
For instance, from 2016 to 2019, direct-to-consumer eCommerce sales grew at three to
six times the rate of overall e-commerce sales.

Increased Competition and Customer Demands

A major challenge facing distributors today is raising consumer expectations. Thanks
to platforms like Amazon and other competitive eCommerce offerings, buyers now expect
fast delivery and high-quality service from companies. 73.6% of online shoppers believe
delivery is the most important aspect of the overall customer experience. High expectations
from buyers are especially prevalent in the B2C world but naturally carry over into the B2B
world as well.

Offering More Selling Channels

Gone are the days when you can have success selling through a single
brick-and-mortar store. Instead, you need to offer multiple sales channels such as physical
stores, an eCommerce site, and online marketplaces (etc). Selling through multiple sales
channels lets you have multiple touchpoints for meeting your customers and lets them buy
from you in any way that they choose.
Aligning Sales Channels with Backend Systems
Your multi-sales channel strategy will fall short if you fail to integrate the systems.
The failure to integrate with backend warehouse and inventory management systems will lead
to inconsistencies in data and will also disrupt visibility since warehouse employees will not
have access to your eCommerce data.
Solution: eCommerce Integration
Integration With Online Marketplaces
With so many companies using sites like Amazon, your distribution company can
benefit from having a presence on this site depending on what type of products you sell.
Integration With eCommerce Site
An eCommerce site means your business can make sales 24/7. To make the most out
of your eCommerce site, you need a system with APIs that allow information to flow
between your system and your eCommerce site.
B2B Online Ordering Portal
For B2B companies, check if your software provider has their own B2B ordering
platform that has direct integration with the software. This will provide a great channel for
your B2B customers and ensure your backend warehouse and inventory data are fully aligned
with your website.
Lack of Adequate Technology
The lack of proper technology is leading to the following challenges for distributors:
- Manual Processes
- Siloed Data
- Difficulties Managing Rebates
- Difficulties Managing Returned Goods
Manual Processes
With a lack of automated tools, businesses are having to rely on manual processes to
keep track of their operational data. They are using paper and pen to conduct inventory
counts and keep track of SKU information, shipment arrivals (etc.). Manual processes lead to
wasted time and excess costs due to labor.

Meaning of Promotion
Promotion is a marketing tool, used as a strategy to communicate between the sellers
and buyers. Through this, the seller tries to influence and convince the buyers to buy their
products or services. It assists in spreading the word about the product or services or
company to the people. The company uses this process to improve its public image. This
technique of marketing creates an interest in the mindset of the customers and can also retain
them as a loyal customer.
Types of Promotion:
Advertising-
It helps to outspread a word or awareness, promote any newly launched service, goods or
an organization. The company uses advertising as a promotional tool as it reaches a mass of
people in a few seconds. An advertisement is communicated through many traditional media
such as radio, television, outdoor advertising, newspaper or social media. Other
contemporary media that supports advertisement are social media, blogs, text messages, and
websites.
Direct Promotion-
It is that kind of advertising where the company directly communicates with its
customers. This communication is usually done through various new approaches like email
marketing, text messaging, websites, fliers, online adverts, promotional letters, catalog
distributors, etc.
Sales Promotion-
This utilizes all sorts of a marketing tool to communicate with the customers and
increase sales. However, it is for a limited time, used to expand customers demand, refresh
market demand and enhance product availability
Self-promotion-
It is a process where the enterprises send their agents directly to the customers to pitch
for their product or service. Here, the response for the feedback of the customer is prompt and
therefore, easy to build trust.
Public Relation-
Popularly known as PR is exercised to broadcast the information or message between a
company (NGO, Government agency, business), an individual or a public. A powerful PR
campaign can be valuable to the company.
Online Promotion-
This includes almost all the elements of the promotion mix. Starting from the online
promotion with pay per click advertising. Direct marketing by sending newsletters or emails.

KEY POINTS OF PROMOTION

 It is a communication tool that incorporates all the elements used to spread awareness
and convince customers to buy good and services
 It is applicable only for short term sales
 It is one of the variables of the marketing mix
 The effect of promotion is short term
 The result or outcome of the promotion is immediate
 It is an economic marketing tool as compared to advertising
 It can be used for all sorts of businesses irrespective of the size, brand of a company
IMPORTANCE OF PROMOTION
 It increases the speed of product and service acceptance.
 Aids in the sales of goods and services in imperfect market conditions.
 It provides effective sales support.
 Fills the gap between the manufacturers and the end consumers.
 Increases the trade pressure in the market.
 Aids in facing industry competition.
 Increases the standard of living.
 Provides employment opportunities.
 Pave way for large-scale selling activities.
PROMOTION MIX
It refers to the sum of promotional tools that are used by the marketer to inform and
persuade the buyers to buy the product. These tools/elements are used in different
combinations depending upon the necessity of information.
ELEMENTS OF THE PROMOTIONAL MIX
Promotional mix elements are as follows.
1 Advertising
It uses mass communication—radio, newspaper, television ads, magazines, and
billboards. Advertising is an element of promotion that transfers open, non-personal
messages to sell a product or service to a wide audience. It can increase profits and market
share.
2 Sales
Sales strategies grab customers’ attention via discounts, offers, free services, flash mobs,
gifts, and trade shows. Customers receive short-term incentives from the distribution
channels (suppliers, dealers, retailers, etc.)
3 Public Relations
A firm’s PR department facilitates long-term relationships with the public, customers,
intermediaries, suppliers, distributors, and retailers. Publicity comes under the purview of PR.
This promotional mix element builds trust and goodwill in the target market.
4 Personal Selling
The term ‘personal selling’ refers to a face-to-face selling process; a firm’s salesperson
interacts with a potential customer in person. This strategy is effective but also expensive.

5 Direct marketing
When customers get a chance to interact with the business directly, they trust those brands
more. Data plays a huge role in the promotional mix in the internet era. Firms compile
important customer data—email addresses, phone numbers, fax, or social media platforms.
In direct marketing, the company uses compiled data to contact customers. This strategy
eliminates unnecessary intermediaries—the firm gains control over sales process.

ADVANTAGES AND DISADVANTAGES

The advantages and disadvantages of the promotional mix are as follows:

 It creates awareness among potential customers for the product or service.
 The promotional mix enhances goodwill, trust, and brand recognition.
 The product or service reaches a wide target audience—potentially creating
a customer base.
 It enhances sales figures—creates demand for the product.
 It facilitates long-term relationships.
 Promotion helps established firms increase their market share.

Now the disadvantages:

 When a firm attempts the promotional mix, marketing budgets skyrocket; not
everyone can afford that.
 Promotion is not a unique feature. If a firm’s competitors also spend on promotion,
the message becomes repetitive for the customers. They are unable to differentiate
between two alternatives.
 An increase in promotion does not directly result in increased sales. Firms need to
monitor each strategy individually and make changes.
 Aggressive promotion can backfire. Consumers can get annoyed if they are exposed
to the same message repetitively. More importantly, a business may not always
recover the heavy expenditure on promotion.