This document discusses the importance and functions of distribution. It defines distribution as spreading products throughout the marketplace so that many people can buy them. This requires an effective transportation system, tracking system, packaging, and placement of products. Distribution is critical because it determines if a company can sell its products more widely than competitors. The document also outlines different distribution methods like direct sales, wholesalers, and retailers. It explains key functions of distribution channels including optimizing sales volume, managing costs of sales, impacting profits, and influencing brand perception. Overall, the document emphasizes that distribution is an important part of the marketing mix that adds value by delivering satisfaction, employment opportunities, communication between producers and consumers, financing support, and production efficiency.

1. Distribution
Importance And Functions
By:Divanshu Pahwa
Bcom(p) Sec A
Roll No.20

2. Meaning Of Distribution
 Distribution means to spread the product throughout the
marketplace such that a large number of people can buy it.
Distribution involves doing the following things
 A good transport system to take the goods into different
geographical areas.
 A good tracking system so that the right goods reach at the
right time in the right quantity.
 A good packaging, which takes the wear and tear of transport.
 Tracking the places where the product can be placed such
that there is a maximum opportunity to buy it.

3. Distribution can make or break a company.
 A good distribution system quite simply means the
company has greater chance of selling its products more
than its competitors.
 The company that spreads its products wider and faster
into the market place at lower costs than its competitors
will make greater margins absorb raw material price rise
better and last longer in tough market conditions.
 Distribution is critical for any type of industry or service.
The best price product, promotion and people come to
nothing if the product is not available for sale at the
points at which consumers can buy.

4. Methods Of Distribution
 Distribution include methods of selling as well as locations.
 Methods include direct sales, wholesalers and retailers.
Direct sales involve you selling directly to the consumer with
no middleman, such as in a store you own, online or with a
catalog.
 Using a wholesaler involves a distributor to get your product
into a variety of channels you might not reach by yourself.
 Using retailers, you sell to stores that mark up your product
to make their profit.

5. Functions Of Distribution
 Sales Volume
One of the functions of a distribution channel is to optimize your sales
volume.
Even though you might have several opportunities to distribute your
product, you might have limited capacity to make your product, so you
must look at which will help you generate the most sales.
If you rely on retailers to sell your product and you add online sales to
your distribution strategy, some of your retailers might drop you if they
believe their sales will drop because customers can purchase more easily
online. Maximum sales doesn’t always mean optimum sales because some
channels have higher associated costs.

6.  Cost of Sales:-
Some distribution channels require more costs to use.
For example, direct sales requires order processing and
fulfillment, including staff time, shipping and credit
card processing software and transaction fees.
Other options might require promotional costs, such as
signage, coupons, displays and sale calls.
This is why distribution channels that offer the highest
sales volumes don’t always offer the highest profit
margins.

7.  Profits
Once you know your expected sales from a potential distribution channel,
your cost of sales and your price per unit, you can calculate your profit
margin per item and gross profits.
This helps you determine which distribution options are the best for you,
based on your ability to fund sales and produce goods.
 Brand
If you rely on a strong brand in the marketplace, you must consider the effect
that selling in a particular location or using a particular method has on your
brand.
Selling a high-end product through a supermarket, where you are sold next to
bargain brands, can damage your image.
If your image includes superior personal service, selling online can reduce
your reputation in this area.

8. Importance Of Distribution
Distribution is one of the important mix among marketing mixes.
 Delivery of satisfaction
Marketing concept emphasizes on earning profit through satisfaction of the customers.
Besides market research for the development and sales of goods according to need and
wants of consumers, the participants of distribution channel also help producers in
production of new goods.
 Value Addition
The functions of distribution such as transportation, warehousing, inventory management
etc. increase the importance of products by creating place utility, time utility and quantity
utility.
Distribution mix plays an important role to increase the value of the products through
delivery of goods in right quantity, at right place and right time.

9.  Employment
The function of distribution creates employment opportunities in society.
Market intermediaries work as direct and indirect sources of employment.
Different producers need to supply their innumerable products to consumers.
Thousands of distributors, agents, wholesalers, retailers, brokers etc. involve
in supplying the products to the consumers.
Similarly, many persons of the society can get job in the transport and
warehouses sectors, etc.
 Communication
Distribution serves as link between producers and consumers.
Producers can make flow of information and messages to consumers about
their products, price, promotion etc. through channel members. Similarly,
they receive information about customers, competitors and environmental
changes from channel members.

10.  Financing
Intermediaries themselves make arrangement to keep reserve and stock of goods.
The producers need not make arrangement and management of distribution centers and
warehouse.
The producers need not do anything except remaining busy in production, the timely
payment by intermediaries and financial helps become more important for smooth operation
of production.
Similarly, the role of finance is also decisive in mobilizing other means of production.
 Efficiency
Producers produce limited types of goods in mass quantity but the consumers demand
different types of goods in small quantity.
When goods are produced in a mass quantity, they can be obtained at lower price.
Distribution helps to satisfy the needs of consumers by supplying assortment of different
products of different producers.
From this, efficiency can be achieved in both production and distribution.

11. Thankyou
Submitted By :
Divanshu Pahwa
Roll No.20
Bcom (p) Sec A