Distribution is one of the many components of your marketing mix. Distribution is basically the process of rendering a product or a service to the consumer or company client who needs it directly. This can either be done directly by the manufacturer or distributor or by utilizing indirect channels either through intermediaries or distributors. The direct channel delivers the product directly to the consumer, whereas the indirect channel delivers the product to the market in question after the manufacturer or distributor has made a profit out of it.
Distribution channels come in various shapes and sizes. The most popular type of distribution channels are the retail chain of producers or distributors, the franchised system or the multilevel marketing (MLM) system. Within each of these systems there are specific channels that fall under the more prominent categories. For example, there are retail chains such as the Home Depot and Costco which operate on a regional basis and provide products made by a manufacturer through that retailer’s own distribution channels.
Another example is the multilevel marketing (MLM) system. In this case, producers recruit a large number of distributors who in turn recruit more distributors, and so on. The income earned by these organizations is generally based on the amount of sales that are made by their team members. In order to attract large quantities of prospective consumers, multilevel marketing companies typically employ a very efficient distribution strategy. Distribution can also refer to the methods used to deliver a product to a consumer for large quantities.
In a reverse channel, the producer delivers its products directly to the consumer. For example, milk is distributed through the milk distributor or the supermarket chain. In the same way, it can also refer to direct marketing of food products and beverages. Direct distribution requires less investment as well as less overhead cost. Because of these advantages, it becomes much more viable for manufacturers and other producers to distribute goods directly to consumers.
There are many kinds of distribution channels. Distribution can be done through retailers, department stores, wholesalers, manufacturers, brokers, manufacturers, middlemen, distributors, agents, or third-party marketers. Distribution can also be done at the household level. Households purchase goods from the local store or department store. Distribution channels may be high-end like department stores or super markets or low-end like discount super markets.
One important factor for a successful direct distribution strategy is for the manufacturer to have a good customer relationship program (CRPM). CRPM refers to the quality and performance measures that a manufacturer will use to measure and improve its service to its customers. This is a measurable process that measures the effectiveness of various actions a manufacturer takes to satisfy a customer. For instance, it can measure the time a product is kept on display, the number of times it is picked up, and how long it is kept on the shelf before being discarded. In this sense, CRPM can help ensure a manufacturer meets its service obligations to its consumers.
The success of any distribution strategies depends heavily on the manufacturer’s ability to develop, produce, market, and distribute products in a cost-effective manner. This involves the production of excellent products at a reasonable price. Some distribution strategies include exclusive distribution, meaning that a manufacturer has exclusive rights to sell a certain type of product. Exclusive distribution helps boost a company’s reputation by providing a unique opportunity to promote and sell its products to target customers. Another important distribution strategy is cross-marketing, which allows manufacturers to sell their products to other consumers.
A key distribution method is direct selling. Direct selling is a two-part system that allows a manufacturer to sell its products directly to its customers. The manufacturer creates and delivers the product to the customer, and then offers the customer a sales opportunity through a distributor. Distributors generally work with sellers of similar products to increase sales and build customer bases.