Distribution management has long been a business challenge. Raw goods can arrive too early and go bad before they are used. Or, finished products can arrive too late, allowing a competitor to seize the lion’s portion of market share. Show
Effective distribution is so crucial that sub-discipline practices became an integral part of supply chain and inventory management, such as just in time inventory. Overall, successful distribution involves many moving parts and methods requiring a strong distribution management strategy fueled by real-time information. Video: What Is Distribution Management?Distribution management is the process used to oversee the movement of goods from supplier to manufacturer to wholesaler or retailer and finally to the end consumer. Numerous activities and processes are involved, including raw good vendor management, packaging, warehousing, inventory, supply chain, logistics and sometimes even blockchain. What Is a Distributor?A distributor is an entity that supplies products to retailers and other businesses that sell directly to consumers. Take, for example, a wholesale liquor distributor that supplies alcohol to restaurants, grocery stores and liquor stores. Other examples include a produce distributor that supplies lettuce, tomatoes and other produce to restaurants; and a pharmaceutical distributor that supplies a variety of prescription-controlled drugs to pharmacies. Distribution vs. LogisticsLogistics refers to the detailed planning and processes involved with the effective supply and transportation of goods. Logistics includes activities and processes such as supply management, bulk and shipping packaging, temperature controls, security, fleet management, delivery routing, shipment tracking and warehousing. It is perhaps easiest to think of logistics as physical distribution. Distribution is a management system within logistics that is focused on order fulfillment throughout distribution channels. A distribution channel is the chain of agents and entities that a product or service moves through on its way from its point of origin to a consumer. Examples of distribution channels include ecommerce websites, wholesalers, retailers and 3rd party or independent distributors. Distribution includes activities and processes such as consumer or commercial packaging, order fulfillment and order shipping. In short, distribution is most easily understood as commercial or sales distribution. Why Is Distribution Management Important?Distribution management is first and foremost about organizing everything involved in getting goods to the buyer in a timely fashion and with the least amount of waste. Therefore, it has a direct impact on profits. What Is a Distribution Network and What Are the Benefits?A distribution network is a connected group of storage facilities and transportation systems. It is formed in accordance with a distribution strategy designed to move goods from manufacturer to wholesalers, retailers or buyers. Advantages of Distribution ManagementBesides delivering higher profits, distribution management eliminates waste in a number of ways, ranging from reduced spoilage to reduced warehousing costs since products and goods can be delivered as needed (“just in time” inventory), rather than stored in bigger bulk (“just in case” inventory). Distribution management leads to decreased shipping charges and faster delivery to customers, and it also makes things easier for buyers as it enables “one stop shopping” and other conveniences and rewards, such as customer loyalty rewards programs. Distribution Management ChallengesDistribution challenges can arise from a variety of disruptions. Natural disruptions include severe weather events, raw material shortages (e.g. bad crop years), pest damages, and epidemics or pandemics. Human disruptions include riots, protests, wars and strikes. Transportation disruptions include transport vehicle disrepair, maintenance downtimes and accidents, as well as delayed flights and restrictive or new transportation regulations such as those regularly seen in trucking. Economic challenges include recessions, depressions, sudden drops or increases in consumer or market demands, new or changes in fees or compliance costs, changes in currency exchange values and payment issues. Product disruptions include product recalls, packaging issues and quality control issues. Buyer disruptions include order changes, shipment address changes and product returns. 5 Factors That Influence Distribution ManagementMany things can influence distribution management. The five most common are:
3 Distribution Management StrategiesAt the strategic level, there are three distribution management strategies:
Choosing a Distribution Management SystemChoosing the right distribution management system for your organization depends a great deal on your organization’s distribution goals and challenges, and the distribution models and channels your company uses. But as a general rule, companies should evaluate:
What Are the 4 Channels of Distribution?There were historically three distribution channels:
What Are the Elements of Distribution Management?The elements of distribution management systems are the steps involved in getting the product from the manufacturer to the end customer and can include: supply chain, blockchain, logistics, a purchase order and invoicing system, vendor relationship management (VRM), customer relationship management (CRM), an inventory management system (IMS), a warehouse management system (WMS) and a transportation management system (TMS). Which of the following contains elements that work together to create a marketing strategy?The marketing mix consists of the four key elements of a marketing strategy: product, price, place and promotion.
When a firm decides to target several market segments and designs separate offers for each?Using a differentiated marketing (or segmented marketing) strategy, a firm decides to target several market segments and designs separate offers for each.
When a company ignores market segment differences and instead decides to target the entire market with one offer this is an example of?1. Undifferentiated Marketing. Often referred to as mass marketing, the undifferentiated strategy basically ignores the differences between market segments and treats the entire market as a single target.
Which of the following is a basic criterion for successfully segmenting markets quizlet?Successful market segmentation depends on four basic criteria: (1) a market segment must be substantial and have enough potential customers to be viable; (2) a market segment must be identifiable and measurable; (3) members of a market segment must be accessible to marketing efforts; and (4) a market segment must ...
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