IMPORTACE, MEANING, NATURE, OBJECTIVES AND CHANNEL OF DISTRIBUTION

 Application of management principles to logistics operations for efficient and cost effective movement of goods and personnel. Indicates routes or pathways through which goods and services flow, or more from producers to consumers. Planning, execution, and control of the procurement, movement, and stationing of personnel, material, and other resources to achieve the objectives of a campaign, plan, project, or strategy. The management of inventory in motion and at rest.

 Interdependent marketing institutions participating in the marketing activities involved in the movement of the flow of goods or services from the primary producers to ultimate consumers.  A path traced in the direct or indirect transfer of ownership of a product as it moves from producers to consumers.

1. Delivery of satisfaction Marketing concept emphasizes on earning profit through satisfaction of the customers 2. Standard of living ◦ Distribution brings improvement in living standard of consumers through generation of employment, increase in income and transfer of ownership 3. Value addition increase the value of the products through delivery of goods in right quantity, at right place and right time.

 Communication ◦ 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.  Employment ◦ The function of distribution creates employment opportunities in society

 Efficiency ◦ 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  Financing ◦ the timely payment by intermediaries and financial helps become more important for smooth operation of production

I. Channels of Distribution A.process through which the products are transferred from the producers to the ultimate consumers. It also known as marketing channels B.members such as merchants agents wholesalers and retailers are middlemen in distribution and they perform all marketing functions. II. Physical Distribution

2. Physical Distribution a) it looks after physical handling of goods and assures maximum customers services. b) It aims at offering of delivery of right goods at the right distribution activities: ◦ Order processing ◦ Packaging ◦ Warehousing ◦ Transportation ◦ Inventory control ◦ Customer service.

 Path way: distribution channels are a pathway through which products and services flow from manufacturers to customers.  Flow: this of goods and services in sequential and usually in directional.  Composition: it is composed of intermediaries also called middlemen who participate in the flow of channel.  Objectives: although channels components largely strive to achieve mutually acceptable objectives, the manufacturer focus is an achieving corporate marketing objective.

 Leader: manufacturer leads the channels components and their behavior is regulated by mutually acceptable code of conduct, trade customer and or contracted stipulation. Thus the company acts as the channels caption and manages the ‘pathway’.  Functions: the intermediaries perform such functions which facilitates transfers of ownership and possession of goods and services from marketers to consumers.

 The searching out of buyers and seller.  Matching goods to requirements of the market(merchandising)  Offering products in the form of assortments packages of items usable and acceptable by the consumers /users.  Persuading and influencing prospective buyers to favor a certain products and its maker [personal selling /sales promotion].  Implementing pricing strategies in such a manner that would be acceptable to the buyers and ensure effective distribution functions.

 Participating actively in the creation and establishment of market for a new product.  Offering pre- and after sales service to customer  Transferring of new technology to the users along with the supply of products and playing green resolution in our country.  Providing feels back information, marketing intelligence and sales forecasting services for their regions their suppliers.  Offering credit to retailers and consumers.

1. Wholesalers 2. Retailers ◦ The institutional retailers are:  Consumer Co- operative stores.  Fair price shops.  Departmental stores.  Chain / multiple stores.  Mail order houses. ◦ The non-institutional buyers are  Street sellers  Peddlers.  Hawkers.

A Customer wants to purchase toothpaste, salt and wheat.

 1. Sorting ◦ Middlemen obtain the supplies of goods from various suppliers and sort them out into similar groups on the basis of size, quality etc.  2.Accumulation ◦ In order to ensure a continuous supply of goods, middlemen maintain a large volume of stock.

 3. ALLOCATION ◦ It involves packing of the sorted goods into small ◦ marketable lots like 1Kg, 500 gms, 250 gms etc.  4. ASSORTING ◦ Middlemen obtain a variety of goods from different manufacturers and provide them to the customers in the combination desired by them. For example, rice from Bulacan & Laguna.

 5. Product Promotion -  6.Negotiation -Middlemen negotiate the price, quality, guarantee and other related matters about a product with the producer as well as customer.  7. Risk Taking - Middlemen have to bear the risk of distribution like risk from damage or spoilage of goods etc

1. Direct Channel or Zero Level Channels ◦ Methods of Direct Channel are:  (a) Door to door selling  (b) Internet selling  (c) Mail order selling  (d) Company owned retail outlets  (e) Telemarketing

1. Indirect channels Forms of indirect channels 1.Manufacturer-Retailer-Consumer (One Level Channel): 2.(b) Manufacturer-Wholesaler-Retailer-Customer (Two level channels) 3.Manufacturer-Agent-Wholesaler-Retailer- Consumer (Three level channels):

 1. Product Related Factors  (a) Nature of Product  (b) Perishable and Non- Perishable Products  (c) Value of Product  (d) Product Complexity  2. Company Characteristics  (a) Financial Strength  (b) Control

 3. Competitive Factors  4. Market Factors  (a) Size of Market  (b) Geographical Concentration  (c) Quantity Purchased  5. Environmental Factor

 THINK ONE SPECIFIC PRODUCT YOU ARE USING OR CONSUMING, ILLUSTRATE THE TYPE OF DISTRIBUTION CHANNEL OF THE PRODUCT.  WHAT IS THE TYPE OF CHANNEL DISTRIBUTION DOES SAN MIGUEL CORPORATION HAVE? EXPOUND YOUR ANSWER SPECIFICALLY