C4 distribution channels

physical distribution channel

method and means by which a product is phisically transferred, or distributed from point of production to available to customer

trading channel

non-physical aspects of the transfer (negociation, buying and selling)

types of distribution channels

indirect (manufacturer to retail) and direct (manufacturer tu consumer)

retailer

selling product to end consumer (low quantities, display & merchandising, customer experience)

wholesaler

selling products to company (high volume or bulk, no merchandising, few customer relationships)

broker

individual or firm that acts as intermediary between an investor and a securities exchange (promote, comissions and fees, presence in unknown markets)

manufacturer direct to retail store

own vehicles, don’t subcontract, full loads are being delivered

manufacturer via manufacturer’s warehouse

finished goods warehouse stored, broken down in individual orders and delivered

manufacturer via retailer’s warehouse

supplying products to retailers distribution or consolidation centre

manufacturer to wholesaler

as intermediaries between manufacturer and small retailers, price advantage by buying in bulk,

manufacturer to cash and carry wholesaler

small independent shops collecting their orders from regional wholesalers, small quantities, not delivered

manufacturer via thrid party distribution service

specialist service for one type of product or for one client company

manufacturer via small parcel carrier

specialist distribution service where the product is any parcel, home deliveries

manufacturer via broker

trading channel not physical distribution channel, marketing

mail order

ordered by catalogue, deliveried to home by post or parcels carrier, bypassing retail store

factory direct to home

direct selling methods (newspaper/magazine advertising), one-off products specially made, no need to be stocked

internet shopping from home

additional specialist home delivery distribution operations, run by 3pl companies, computer to computer

factory to factory/business to business

all of the movements of industrial products

differences in physical and trading channel structures

types of intermediaries, number of levels of intermediaries, intensity of ditribution at each level

physical channel structure

production warehouse, manufacturer trunk vehicle, distribution centre, 3pl carrier, regional depot, local delivery, shop/store, consumer

trading channel structure

central sales, district sales, wholesaler, retailer, consumer

channel objectives

make the product readily available to the market consumers aimed

enhance the prospect of sales being made

achieve cooperation with regard to any relevant distribution factors

achieve a given level of service

minimize logistics and total costs

receive fast and accurate feedback of information

market characteristics

size, spread and density; long channel (several points, spread area), short channel (few steps, limited area)

product characteristics

high value items (short channel)

complex product (direct selling)

new products (3pl channel)

time-sensitive (fast or short channel)

products w/handling constrian (specialist physical distribution channel)

competitive characteristics

activities of competitors, similar products, using similar or different channels, avoid risk of substitution

designing a channel structure

set and coordinate distribution objectives

specify the distribution tasks

develop alternative channel structures

evalueate the relevant variables

choose the best channel structure

select channel members

opportunities for outsourcing

partnership approach

incentivized contracts

integrated global contractors

more rigorous selection of contractors

better mettrics

environmental issues

4pl