Physical Distribution management helps in delivering the customer what is wanted in specific time and cost.
The Objective of distribution management is to design & operate a distribution system that attains the required level of customer services & does so at least cost
Physical distribution management (PDM) caters to the actual movement of products through the various channels of distribution. This field of study is concerned with various aspects related to transportation of the goods, the main of which is transportation cost.
This lesson on Physical Distribution includes the nature and objectives of the Physical Distribution and also differentiated with Marketing Channels. This logistics management integrates parts of the managerial functions of warehousing, transportation and organizational responsibility of the marketer in the processing and inventory of orders.
Distribution Management, Need for Marketing Channels,Decision involved in setting up the channels, Management Strategies, Introduction to logistics Management, Retailing, wholesaling, Multi Channel Marketing.
A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, from the point of production to the point of consumption.
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11. ļ Pull Strategy ā involves the manufacturer using
advertising and promotion to induce consumers to
ask intermediaries for the product ā thus inducing
the intermediaries to order the product.
ļØ This strategy is appropriate when there is high brand
loyalty and high involvement in the category,
ļØ When consumer perceives differences between
brands, and,
ļØ When consumers choose the brand before they go
to the store.
12. Channel - Design Decisions
Designing a channel system calls for
a) Analyzing customer needs.
b) Establishing channel objectives.
c) Identifying the major channel alternatives.
d) Evaluating them.
13. ļ Analyzing Service output levels desired by customers.
Understanding what, where, why, when and how target
customers buy is the first step in designing the marketing
channels.
ļ Establishing the channel objectives and constraints.
ā Channel objectives vary with product characteristics ;
Perishable, Bulky, Non - standardized, High unit value.
ā Channel design must take into account the strengths and
weaknesses of different types of intermediaries.
ļ Identifying the major channel alternatives.
ā Sales force, agents, distributors, dealers, direct mail,
telemarketing, internet etc.
14. Types of intermediaries
ļ Number of intermediaries
ā Exclusive Distribution
ā Selective Distribution
ā Intensive Distribution.
ļ Terms and Responsibilities of channel members. The
main elements in the ātrade - relations mixā are - price
policies, conditions of sale, territorial rights and specific
services to be performed by each party.
15. ļ Evaluating the major channel alternatives
ā Economic Criteria
ā Control Criteria
ā Adaptive Criteria
ļ Channel Management Decisions
ā Selecting Channel Members.
ā Motivating Channel Members.
ā Training, supervision, encouragement etc.
16. ļ Evaluating channel members
ā Sales quote attainment, customer delivery time, average
inventory levels, cooperation in promotional and training
programmes.
ļ Modifying channel Arrangements.
ā System will require periodic modification to meet new
conditions in the market place.
ā Modifications will be necessary when consumer buying
patterns change, market expands, product matures, new
competition arises and a new innovation in distribution
channel emerges.
17. ļ Multichannel Marketing Systems occurs when a
single firm uses two or more marketing channels to reach
one or more customer segments.
Ā
ā Adding more channels, companies gain three
important benefits : increased marketing coverage,
channel cost and more customized selling.
Ā
ā New channels may also introduce conflict and
control problems.
18. ļ Types of conflict and competition.
Ā
ā Vertical channel conflict - between different levels.Ā
ā Horizontal channel conflicts - conflict between
members at the same channel.
Ā
ļ Multichannel conflict.
Ā
Two or more levels compete with each other in selling to
the same market.
ļ Causes of channel conflict.Ā
ā Goal incompatibility.Ā
ā Unclear roles and rights .Ā
ā Differences in perceptionĀ
ā Dependence