Principles of Distribution
The process of ensuring goods are available in the right quantities, at the right location, and at the right time.
What is distribution management?
A type of distribution channel where manufacturers sell directly to consumers without intermediaries.
What is direct distribution?
The organization that acts as an intermediary in the distribution process between producers and consumers.
What is a distributor?
This strategy is used when a company wants its product to be available everywhere, such as soft drinks or snack foods.
What is intensive distribution?
This type of distribution eliminates intermediary steps between the manufacturer and customer.
What is Direct Distribution?
Distribution systems aim to maximize this, while keeping costs as low as possible.
What is customer satisfaction?
This type of channel involves wholesalers and retailers acting as intermediaries between the producer and the consumer.
What is indirect distribution?
The process of grouping products into standard sizes or quantities for easier handling and transportation.
What is standardization?
A strategy that focuses on selling through a small number of retail outlets to maintain control over the brand and price.
What is selective distribution?
This distribution model uses multiple distribution centers to serve customers more quickly.
What is Decentralized Distribution?
This principle involves choosing the best routes to minimize transport costs and lead times.
Transportation Optimization
Channels in which products are sold through multiple retailers or wholesalers.
What is dual distribution?
This term refers to the process of transporting goods from one point to another in the distribution network.
What is logistics?
A distribution strategy often used for high-end luxury goods where the product is sold through a single or very few outlets.
What is exclusive distribution?
This distribution model minimizes storage time by moving products directly between vehicles.
What is Cross-Docking
Understanding customer needs and expectations is fundamental. Timely delivery, product quality, and responsive service enhance customer satisfaction and loyalty
Customer Focus
A form of distribution where companies sell their products through online platforms.
What is e-commerce distribution?
The physical network and system used to store and move goods from production to the consumer.
What is a supply chain?
This strategy combines traditional brick-and-mortar stores with online platforms to reach a broader audience.
What is omnichannel distribution?
In this distribution model, products go directly from the supplier to the customer, bypassing the retailer's warehouse.
What is Drop Shipping?
Fostering strong relationships with suppliers, distributors, and logistics providers enhances the distribution network's efficiency.
Collaboration and Communication
This type of indirect channel involves an agent or broker along with a wholesaler and a retailer in the distribution process, resulting in a pathway that looks like this: manufacturer → agent → wholesaler → retailer → customer.
What is a three-level channel?
By optimizing various processes within the supply chain, businesses can reduce operational costs associated with storage, transportation, and order fulfillment.
Cost Efficiency
This strategy involves delaying the final assembly of a product until the last possible moment in the supply chain.
What is postponement strategy?
Drop shipping helps businesses reduce these two logistical concerns.
What are warehousing and inventory management?