1. Logistics & Distribution Management
Presentation on Distribution Management System
Team
Name Roll No. Organization Position Held
Ankit Upadhayay 04 Himani industries Ltd. Export coordinator
Hitesh Mhapankar 64 Mukund Industries Ltd. Production supervisor
Nikhil Patil 17 Wadhwa Group Procurement executive
Rahul Nadoskar 47 Trans-Asia Biomedical. Commercial executive
Shankar Gawade 21 Maersks India Pvt. Ltd. Customer support team
Swapnil Juvetkar 41 Mahanagar Gas ltd. Junior engineer
Ravi Lakhani 50 General Mills India P Ltd. Production planner
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2. Definition : The management of
the efficient transfer of goods from
the place of manufacture to the
point of sale or consumption.
Distribution management
encompasses such activities as
warehousing, materials handling,
packaging, stock control, order
processing, and transportation.
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4. Product
A product is anything that can be offered to a market that might satisfy a want or
need in retailing. For e.g. refrigerator , T.V., Mobile phone etc.
Place
The place is where you can expect to find your customer and knowing this place,
you have to look for a distribution channel in order to reach your customer.
Price
Price sometimes refers to the quantity of payment requested by a seller of goods
or services, rather than the eventual payment amount.
Promotion
Promotion is one of the market mix elements, and a term used frequently in
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5. The prime of object of production is its consumption. The movement of
product from producer to consumer is an important function of marketing. It
is the obligation of the producer to make goods available at right place, at
right time right price and in right quantity. The process of making goods
available to the consumer needs effective channel of distribution. Therefore,
the path taken by the goods in its movement is termed as channel of
distribution. The goods may be sent to the consumer directly or indirectly
through middlemen. The channel of distribution may be classified as:
A) Selling through direct channels
B) Selling through indirect channels
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7. A) Selling through direct channels
This is the oldest, shorter and the simple channel of distribution. The producer sells the product
directly without involvement of any middle man. The sale can be made door to door through
salesman, retail stores and direct mail. Certain industrial and consumer goods such as clothes,
shoes, books, hosiery goods, cosmetics, household appliances, electronic goods etc., may be sold
through direct contact. Perishable goods such as vegetable and fruits can also be sold directly.
Advantage of selling through direct channels
It is simple and fast.
It is economical.
Disadvantages of selling through direct channels
Non-availability of expert services of middle man.
Large investment is required.
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8. B) Selling through indirect channel
According to this method of indirect selling, product is passed on to the customers through
intermediaries, known as wholesalers, retailers and agents. These channels may be as under:
1. Producers -> Wholesalers -> Retailers -> Customer Two level Channel: It is commonly used
channel of distribution. It is also known as traditional or normal channel of distribution. This channel is
useful for small producers for small means. The channel is used for consumer goods. The common
practice is that the manufacturer sells goods in large quantity to wholesalers, who sell goods to retailers
in small quantity. Finally goods are sold to customers in pieces.
2. Producer -> Agent -> Retailer -> Consumer or Two level Channel: The common practice in this
two level channel is that the goods are sold to the agent in bulk. The agent sells goods to retailer, who
sells goods to customers in pieces. This channel is suitable where the retailers are few and geographically
centered. This channel is commonly used in textile, machinery, equipment and agricultural products.
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9. 3. Producer -> Agent -> Wholesaler -> Retailer -> Customer or Three level Channel: The
common practice in this three level channel is that goods are sold by the producer to the agent,
who sells it to the wholesaler, who sells to the retailers who finally sells goods to customers.
This is the longest channel of distribution. This practice is useful, when the producer wants to
the relieved of the problem of distribution. This channel is popularly used in textile.
4) Producer -> Retailer -> Customer or one level Channel: Under this channel the producer
sells goods to retailers, who sell the goods to customers. This channel is popular with the
departmental stores, chain stores and supermarkets etc., because these are large scale retailers.
Generally readymade garments, shoes home appliances and automobiles are sold through this
channel.
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10. Patterns of Distribution decides the intensity of the distribution & also
decides the service level provided.
Types of Distribution intensities:
1) Intensive
2) Selective
3) Exclusive
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11. Intensive Distribution : is done through every reasonable outlet available – FMCG
Strategy is to make sure that, the product is available in as many outlets as possible.
Preferred for Consumer, Pharmaceuticals & automobile spare.
Selective Distribution: Multiple but not all outlets in the market
Only a few selected outlets are allowed to keep the product
Outlets selected in line with the image of the company wants to project.
Preferred for High Value items like Jewelers
Exclusive Distribution: Highly selective choice of outlets, may be only one in the whole
market.
Could include outlets set up by the company itself (Bata)
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12. Channel format is basically decided by who Drives the market
1) Producer Driven
2) Seller Driven
3) Service Driven
4) Others
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13. Producer Driven format:
This is the effort of the producer / manufacturer to reach the product to his
consumers
Examples:
Company owned retail outlets (Bata, Petrol Pump)
Licensed Outlets (MC Donald's)
Franchisees
Brokers
Vending Machines
Company contracted Distributors
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14. Seller Driven:
This is where producer / manufacturer uses existing channels to reach large
number of end users.
Examples:
Existing wholesalers and Retailers
Modern Retail formats
Specialty shops (Shoppers stop)
Discount stores (D Mart)
Local pheriwalas
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15. Service Driven
These are the people who facilitate the distribution
Examples:
Transport & Freight forwarders
Warehouse space provider
C&F Agents
3P Logistics provider
Couriers
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16. Others include
Multi level marketing systems
Cooperative societies
TV Home shopping
Catalogue marketing
Internet
Exhibitions / fares / Trade shows
Database marketing
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17. Multi channel Distribution:
Used in situation where there are same products but different market segments,
unrelated products in same markets, size of buyer varies & reach is difficult.
Company uses different channels to reach same / different market segment.
FMCG’s have separate network for retail markets & institutions
Pharmacy companies may use different channels to reach Doctors, Chemists &
Hospitals
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18. Thanks for your Attention
Any question / Feedback
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