Types of Distribution
Generally, distribution is of two types. They are as follows:
Commercial distribution : Commercial distribution is also known as sales distribution. This type focuses on increasing the sales of the company. It allows a firm to find a way by which they can identify their target audience. The distribution here occurs via sales channels.
Physical distribution : Physical distribution is also known as logistics. It involves the suppliers, marketing, sales, inventory, and warehouse. It is considered important because if logistics are not maintained, the organization will suffer.
Factors Affecting Distribution Management System
In a distribution management system, there are a lot of things that can easily influence it. The common factors that influence are as follows:
Purchasing habits of buyers: Buyers usually have different purchasing habits, which can easily influence distribution the patterns. Because of this, the patterns and management system need to be changed.
Perishability of the products: If the item is perishable, then to prevent its loss, the item needs to have a quick distribution management system.
Mix forecasting of products: It is usual that the forecast of some products mixes easily, and the forecast of some depends upon the seasons or other factors.
Advantages of Distribution Management System
If a distribution management system is effectively implemented, then there are some major advantages that one can get from it. Following are some of the advantages:
One of the major advantages includes the profit. If the distribution is managed properly, it definitely leads to an increase in profit and sales.
This system keeps the entire supply chain in an organized manner.
If this is implemented efficiently, it makes the supply chain run smoothly.
It keeps the consumers satisfied.
The system helps the suppliers or manufacturers as well to stay on track and supply things timely.
A good distribution management system will diminish the errors in the delivery.
A systematic distribution management system leads to the delivery of goods in a short period of time.
This system also reduces the wastes that are generated.
It reduces the cost of warehousing.
It also allows an organization to calculate the overall cost of the supply chain, leading to a focused and calculated investment.
Distribution Management Strategies
There are primarily three distribution management strategies that one can follow:
Mass strategy: This strategy is implemented when a company is aiming at a mass market. If a company wants to sell its products to general consumers present anywhere, this strategy must be followed.
Selective strategy: The target of this strategy is only towards a specific group of suppliers or manufacturers. It involves retail sectors as well, like hair salons and department stores.
Exclusive strategy: This strategy targets distributing the products to a limited group only. For instance, the manufacturers of brands like Nike will only supply their products to those Nike dealers who are authorized.
