Lesson 1: Distribution Management

What is Distribution Management?

Distribution management refers to the process of overseeing the movement of goods from supplier or manufacturer to point of sale. It is the management of movement and coordination of supply and demand in the creation of time, place, and utility of goods.

What is Distribution Planning?

It is the systematic decision-making regarding the physical transfer of goods and services from manufacturer to final user.

What are the functions of Distribution Planning?

1. Transportation

2. Inventory management

3. Consumer transaction

What are the components of a Distribution Channel?

1. Manufacturers

2. Service providers

3. Wholesalers

4. Retailers

5. Marketing specialists

6. Consumers

What are the types of intensity of channel coverage?

1. Exclusive distribution

2. Selective distribution

3. Intensive distribution

4. Dual channels

What is Physical Distribution?

It is a broad range of activities primarily concerned with the efficient movement of finished goods from the end of the production line to the consumer.

What are the components of Physical Distribution?

1. Customer service - Satisfied customers

2. Shipping - Transport of durable products

3. Warehousing - To store raw materials and semi-processed goods properly

4. Inventory control - Provide sufficient supply of raw materials at the right time and at the right place

5. Packaging - Presentable products

6. Receiving materials handling - Properly manage the materials for final production

What are the different modes of Transportation?

1. Railway/roads - Heavy and bulky items; low value over long distances

2. Motor carriers - Small items over short distances

3. Waterways - Bulky, low-value products, inter-coastal shipping

4. Airways - Fastest, most expensive, usually for perishable and emergency goods

5. Pipelines - To transport liquid, gases, and semi-liquid goods

What is the objective of Inventory Management?

Its objective is to provide a continuous flow of goods (tangible) and to match the quantity of goods available as close as possible with sales demand to meet the required profit in production and delivery.

What are the types of Inventory Management strategies?

1. Just-in-time (Quick Response) inventory - Frequent ordering, lower quantity

2. Electronic Data Interchange - Computer linkups between suppliers and wholesalers, timely monitoring of available stocks

What is Warehousing?

A physical facility used primarily for the storage of goods and maintenance and distribution of products.

What are the types of Warehouses?

1. Private warehouses - Owned by the manufacturer

2. Public warehouses - For rent

3. Bonded warehouses - For imported goods

4. Field warehousing - Where a receipt is issued by a public warehouse

What is Wholesaling?

It is the process of buying, carrying, and merchandising products for subsequent resale to organization customers, retailers, and/or other wholesalers but not directly to the final consumer.

What are the types of Wholesaling?

1. Manufacturer wholesaling

2. Merchant wholesaling

3. Agents and Brokers

What is Retailing?

Sale of goods to the end user of the product.

What are the types of Retailing?

1. Independent retailer

2. Agents and Brokers

3. Retail franchising

4. Leased department

5. Consumer cooperative

What are the Store Strategy Mix types?

1. Convenience store - 7-11, MiniMart

2. Conventional supermarket - Dali, Puregold Jr., CityMall

3. Superstore - SM, WalterMart

4. Combination store

5. Specialty store

6. Variety store

7. Department store

8. Retail catalogue showroom

What are the types of Non-Store Operation?

1. Vending machines

2. Direct selling

3. Direct marketing

What is Distribution Strategy?

It is the process of moving goods and services from the company to the customers.