1. Logistics & Distribution Management Presentation on Distribution Management SystemTeamNameRoll No. OrganizationPosition HeldAnkit Upadhayay 04 Himani industries Ltd.Export coordinatorHitesh Mhapankar64 Mukund Industries Ltd.Production supervisorNikhil Patil17 Wadhwa GroupProcurement executiveRahul Nadoskar47 Trans-Asia Biomedical.Commercial executiveShankar Gawade21 Maersks India Pvt. Ltd. Customer support teamSwapnil Juvetkar41 Mahanagar Gas ltd.Junior engineerRavi Lakhani50 General Mills India P Ltd.Production planner11-Mar-131

2. Definition : The management ofthe efficient transfer of goods fromthe place of manufacture to thepoint of sale or consumption.Distribution managementencompasses such activities aswarehousing, materials handling,packaging, stock control, orderprocessing, and transportation. 11-Mar-13 2 3. 11-Mar-133 4. Product A product is anything that can be offered to a market that might satisfy a want or need in retailing. For e.g. refrigerator , T.V., Mobile phone etc.Place The place is where you can expect to find your customer and knowing this place, you have to look for a distribution channel in order to reach your customer.Price Price sometimes refers to the quantity of payment requested by a seller of goods or services, rather than the eventual payment amount.Promotion Promotion is one of the market mix elements, and a term used frequently in marketing. 11-Mar-134 5. The prime of object of production is its consumption. The movement ofproduct from producer to consumer is an important function of marketing. Itis the obligation of the producer to make goods available at right place, atright time right price and in right quantity. The process of making goodsavailable to the consumer needs effective channel of distribution. Therefore,the path taken by the goods in its movement is termed as channel ofdistribution. The goods may be sent to the consumer directly or indirectlythrough middlemen. The channel of distribution may be classified as:A) Selling through direct channelsB) Selling through indirect channels 11-Mar-135 6. 11-Mar-136 7. A) Selling through direct channelsThis is the oldest, shorter and the simple channel of distribution. The producer sells the productdirectly without involvement of any middle man. The sale can be made door to door throughsalesman, retail stores and direct mail. Certain industrial and consumer goods such as clothes,shoes, books, hosiery goods, cosmetics, household appliances, electronic goods etc., may be soldthrough direct contact. Perishable goods such as vegetable and fruits can also be sold directly.Advantage of selling through direct channelsIt is simple and fast.It is economical.Disadvantages of selling through direct channelsNon-availability of expert services of middle man.Large investment is required. 11-Mar-13 7 8. B) Selling through indirect channelAccording to this method of indirect selling, product is passed on to the customers throughintermediaries, known as wholesalers, retailers and agents. These channels may be as under:1. Producers -> Wholesalers -> Retailers -> Customer Two level Channel: It is commonly usedchannel of distribution. It is also known as traditional or normal channel of distribution. This channel isuseful for small producers for small means. The channel is used for consumer goods. The commonpractice is that the manufacturer sells goods in large quantity to wholesalers, who sell goods to retailersin small quantity. Finally goods are sold to customers in pieces.2. Producer -> Agent -> Retailer -> Consumer or Two level Channel: The common practice in thistwo level channel is that the goods are sold to the agent in bulk. The agent sells goods to retailer, whosells goods to customers in pieces. This channel is suitable where the retailers are few and geographicallycentered. This channel is commonly used in textile, machinery, equipment and agricultural products.11-Mar-138 9. 3. Producer -> Agent -> Wholesaler -> Retailer -> Customer or Three level Channel: Thecommon practice in this three level channel is that goods are sold by the producer to the agent,who sells it to the wholesaler, who sells to the retailers who finally sells goods to customers.This is the longest channel of distribution. This practice is useful, when the producer wants tothe relieved of the problem of distribution. This channel is popularly used in textile.4) Producer -> Retailer -> Customer or one level Channel: Under this channel the producersells goods to retailers, who sell the goods to customers. This channel is popular with thedepartmental stores, chain stores and supermarkets etc., because these are large scale retailers.Generally readymade garments, shoes home appliances and automobiles are sold through thischannel.11-Mar-139 10. Patterns of Distribution decides the intensity of the distribution & alsodecides the service level provided.Types of Distribution intensities:1) Intensive2) Selective3) Exclusive11-Mar-1310 11. Intensive Distribution : is done through every reasonable outlet available FMCGStrategy is to make sure that, the product is available in as many outlets as possible.Preferred for Consumer, Pharmaceuticals & automobile spare.Selective Distribution: Multiple but not all outlets in the marketOnly a few selected outlets are allowed to keep the productOutlets selected in line with the image of the company wants to project.Preferred for High Value items like JewelersExclusive Distribution: Highly selective choice of outlets, may be only one in the wholemarket.Could include outlets set up by the company itself (Bata)11-Mar-13 11 12. Channel format is basically decided by who Drives the market1) Producer Driven2) Seller Driven3) Service Driven4) Others 11-Mar-13 12 13. Producer Driven format:This is the effort of the producer / manufacturer to reach the product to hisconsumersExamples:Company owned retail outlets (Bata, Petrol Pump)Licensed Outlets (MC Donalds)FranchiseesBrokersVending MachinesCompany contracted Distributors11-Mar-1313 14. Seller Driven:This is where producer / manufacturer uses existing channels to reach largenumber of end users.Examples:Existing wholesalers and RetailersModern Retail formatsSpecialty shops (Shoppers stop)Discount stores (D Mart)Local pheriwalas 11-Mar-1314 15. Service DrivenThese are the people who facilitate the distributionExamples:Transport & Freight forwardersWarehouse space providerC&F Agents3P Logistics providerCouriers 11-Mar-13 15 16. Others includeMulti level marketing systemsCooperative societiesTV Home shoppingCatalogue marketingInternetExhibitions / fares / Trade showsDatabase marketing11-Mar-1316 17. Multi channel Distribution:Used in situation where there are same products but different market segments,unrelated products in same markets, size of buyer varies & reach is difficult.Company uses different channels to reach same / different market segment.FMCGs have separate network for retail markets & institutionsPharmacy companies may use different channels to reach Doctors, Chemists &Hospitals11-Mar-13 17 18. Thanks for your AttentionAny question / Feedback11-Mar-1318