Distribution Methods and Transport Methods

Distribution: restriction of supply Transport Methods, Hub Locations and Distribution Centers, choice of distribution medium to point-of-sale, Distribution and competitive advantage Mahesh Swar, 29, wlc

Choosing the right channel of distribution is crucial in getting product to the target markets place. Manufacturer need ensure that products are available at the right time and in the right quantities. Consumer dont care how a product was moved or stored or what some channels members had to do to provide it. Most customer would prefer very good service at very low price. So most physical distribution decision involves trade offs between costs , the customer service level.

Physical Distribution Concept Focuses to on the whole Distribution System It says that all transporting , storing, and product handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize cost of distribution for given customer service level. Management has to decide about service level to offer Find the lowest total cost for the right service level. A cost comparison of alternative system

Distribution Channel Function



1. 2. 3. 4. 5. 6. 7. 8.

A distribution channel moves goods and services from producers to consumers .It overcomes the major time , place, and possession gaps that separate goods and services from those who would use them. Information Promotion Contact Matching Negotiation Physical Distribution Financing Risk Taking

Number of Channels Levels Distribution channels can be described by the number of channel levels involved. Each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer is a channel level. Consumer Direct Marketing Channel Retailer Consumer Ret Retai Consumer Consumer

Channel 1 : Manufacturer Channel 2: Manufacturer Cha 3: Manuf Cha 4: Manuf Other Indirect Channel Wholesaler Wholesaler Jobber

Major Logistic Function

   

Order Processing Warehousing Inventory Transportation

      

Mode of Transportation Railroads large loads moved at low cost. Trucks are more expensive but flexible and essential. Ship it overseas but slow low cost Inland waterways are important Pipelines move oil and gas.easy to attack Airfreight is expensive but fast and growing

  

How to select Best Alternative Transporting The transporting function should fit into the whole marketing strategy But the best transporting alternative depends on the product , other physical distribution decision , and what service level the company wants to offer. The best alternative should provide the level of service , speed and dependability required at as low a cost as possible. Thus, different transportation have different strength and weakness.