The document discusses the concept of distribution, highlighting its two main components: channels of distribution and physical distribution. It covers the roles of wholesalers and retailers, factors influencing channel selection, channel conflicts and their resolutions, as well as the objectives and functions of marketing logistics. Additionally, it details logistics functions such as transportation, warehousing, order processing, inventory management, and material handling to maximize customer satisfaction and efficiency in distribution.

1. Distribution Decision

2. Concept of Distribution
Distribution is the route or means through which the ownership of products and
services move from the manufacturer to the ultimate users or consumers at a
right time, to the right place through right means. Distribution includes two
components. They are channels of distribution and physical distribution.
• Channel of Distribution: Channel of distribution refers to the various
intermediaries who help in moving the product from the producer to the
consumer. The channel of distribution involves several individuals and
institutions such as producers, suppliers, industrial users, brokers, agents,
wholesalers, retailers and consumers.
• Physical Distribution: physical distribution is the management of physical flow
of goods and establishment and operation of flow systems. Physical distribution
creates time and place utility which maximizes the value of goods "by delivering
them to right customer at the right time and right place.” It includes; materials
handling, inventory management and control, order processing, transportation
and warehouse.

3. Objectives of Distribution
•Minimization of total cost
•Transfer of product ownership
•Regular supply of goods
•Availability of goods
•Promotion of goods and services
•Utility creation
•Customer satisfaction

4. Channel Structure for Consumer Products

5. Channel Structure for Industrial Products

6. Meaning of Wholesaler
wholesalers are merchants who normally buy from several manufacturers or
producers and sell to a large number of retailers, industrial users and other
institutional users.
Role or Functions of Wholesaler in Distribution System
• Buying and Assembling
• Dividing/Dispersing
• Transportation
• Warehousing
• Financing
• Risk-bearing
• Market Information
• Grading, Packing and Packaging

7. Meaning of Retailer
Retailer is one whose business is to sell to consumers a wide variety of goods
which are assembles at his premises as per the needs of final users.
Role or Functions of Retailer in Distribution System
• Buying and Assembling
• Transportation
• Storage
• Grading
• Financing
• Risk Bearing
• Selling
• Market Research

8. Channel Selection Factors
1. Product Considerations
• Unit Price or Value
• Nature of Product
• Technical Nature
• Bulk and Weight
2. Market Considerations
• Consumer or Industrial Market
• Number of Potential Buyers
• Size of the Order
• Geographic Concentration of Market
• Buying Habits of Customers

9. Cont’ed
3. Company/ Manufacturer Considerations
• Size of Manufacturer
• Reputation and Financial Resources
• Managerial ability and Experience
• Services Provided by the Channels
• Goodwill
• Desire to Control the Channels
4. Middlemen Considerations
• Availability of Desired Middlemen
• Services Provided by the Middlemen
• Attitude of Middlemen
• Cost of Distribution
• Reputation and Financial ability

10. Cont’ed
5. Environmental Considerations
• Government Rules and Regulations
• Economic Condition
• Social Environment

11. Channel Conflicts
Channel conflict exists when one channel member perceives another channel
member to be acting in a way that prevents the first member from achieving its
distribution objectives.

12. Types of Channel Conflicts

13. •Goal Incompatibility
•Unclear Role
•Poor Communication
•Perceptual Difference
•Ideological Difference
•Terms and Condition
•By–passing Channel
Causes of Channel Conflict

14. Channel Conflict Resolution
•Problem solving
•Goal modification
•Persuasion
•Bargaining
•Diplomacy
•Improvement in communication

15. Concept of Marketing Logistics (Physical Distribution)
Physical distribution is the management of physical flow of goods and
establishment and operation of flow systems. Physical distribution creates time
and place utility which maximizes the value of goods ‘by delivering them to right
customer at the right time and right place.

16. Objective of Marketing Logistics
•To provide better customer service
•To increase sales
•To reduce cost
•To establish differential advantage over rivals
•Developing good and effective communication
system

17. Major Logistics Functions
•Transportation
•Warehousing
•Order processing
•Inventory management
•Material handling
•Customer services

18. Transportation
All movement of materials and goods outside the undertaking is called
transportation. Transportation involves loading and un-loding of products and
shipment of products between the places of dispatch and arrival.
• Railway Transport
• Road Transport
• Water Transport
• Air Transport
• Pipelines

19. Warehousing
Warehousing is an act of storing and assorting the finished goods so as to create
maximum time utility at minium cost. Warehousing covers two sub functions
namely, movement and storage finished goods.

20. Order processing
The order processing sub-system of the physical distribution management
system should include provisions for bulling, granting credit, preparing invoices
and collecting past due accounts.
• Order entry
• Order handling
• Order delivery

21. Inventory control and Management
Inventory management is a science primarily about specifying the shape and
percentage of stocked goods. It is required at different locations within a facility
or within many locations of a supply network to precede the regular and
planned course of production and stock of materials.

22. Material Handling
Material Handling is the field concerned with solving the pragmatic problems
involving the movement, storage in a manufacturing plant or warehouse,
control and protection of materials, goods and products throughout the
processes of cleaning, preparation, manufacturing, distribution, consumption
and disposal of all related materials, goods and their packaging.
• Mechanical handling
• Non-mechanical handling

23. Customer services
Customer service is the act of taking care of the customer's needs by providing
and delivering professional, helpful, high quality service and assistance before,
during, and after the customer's requirements are met.