Distribution is probably one of the oldest forms of marketing. Distribution has been around since the beginning of time. It is a very broad field involving all aspects of distribution. Distribution includes transportation, gathering and holding of resources by any method including roadways, air and other modes of transport and storage. Distribution also involves the conveyance of data or information and its storage. Distribution is also one of the four pillars of the marketing combination.
Distribution is either the direct method of distributing the product or the indirect method of distributing it. Direct method means gathering of resources directly from the producers or owners or through intermediaries and channels. In this method the resources are collected from the consumers directly. On the other hand, indirect method involves gathering resources by means of marketing or advertising campaigns, trade displays, sales promotion, price reviews etc. through various channel or mediums.
There are various distribution channels available in the market. Distribution can either be direct or indirect. In the direct distribution method, the products or services are distributed to the consumers directly. These products or services are produced or supplied by one company in bulk quantity at a fixed retail price. These goods are marketed to the consumers through the company’s own distribution system and the consumer purchases them directly from the manufacturer or retailer.
The manufacturer’s distribution channel generally distributes its products or goods to retailers at the retail price set by it. However sometimes the manufacturer may sell its goods through a chain of dealers or suppliers who bring the products directly to the consumers. Sometimes a retailer may purchase goods directly from the manufacturer or supplier. Whichever distribution channel is used, the purpose is to make the products easily accessible to the consumers.
There is another type of distribution which is called the selective distribution approach. This type of distribution distributes goods only to a specified group of consumers. It can be limited to a particular region, group of people, age group, occupation or product type. The goods could also be distributed on an annual quota or on a promotional basis.
Distribution of goods through a distributor is normally done through a broker. However, there are distributors who directly sell to the customers. These companies sell directly to the customers. Normally, the distribution channel is set up between the manufacturer and the distributor. It is the duty of a manufacturer to provide his manufactured good to the distributor so that he can successfully sell it to the end users.
Distribution in simple terms consists of three channels manufacturers distributing their manufactured goods to the consumers, retailers selling them to the consumers and brokers distributing them to the consumers. Each channel has its own advantages and disadvantages. For example, distribution of goods through manufacturers directly gives the manufacturers the control over pricing, marketing and distribution. On the other hand, retailers can solve many distribution problems by entering into a partnership with a manufacturer. On the other hand, brokers can serve as intermediaries and help manufacturers to sell and distribute their manufactured good to the end users.
In case of large scale distribution, different strategies like joint ventures, buying out the rival companies and entering into joint ventures will be adopted. It is important for a company to adopt a proper distribution strategy to maximize the productivity, profits and bottom line of the company. Hence, the company needs to think about different distribution strategies to reach at the consumers and achieve the goal of expansion of sales.
The most important part of the distribution process is marketing strategy which involves advertising, promotion and creating awareness among the consumers. The type of marketing strategy adopted should be according to the product type, market penetration and target customers. Some of the effective marketing strategies are direct mail, telemarketing, creating a brand image, internet marketing, promotion of the company website and search engine optimization. These are very effective in reaching the potential consumers and are capable of creating consumer awareness. Moreover, they also improve the sale of the product and increase its demand in the market.
There is another distribution channel called exclusive distribution channel which has some advantages over the other ones. For example exclusive distribution channel owners can offer better products and services at cheaper prices because there is no other company competing with them. But there are some disadvantages too like the lack of access to consumers, lower margins, limited number of products etc. It is up to the management team to decide whether to adopt exclusive or non-exclusive distribution strategy for the products and services.
The efficiency of the distribution strategy depends on the selection of the distribution channels for carrying out the distribution of the good, efficient technical support provided by the manufacturer and effective marketing strategy. It is advisable to start the distribution process after the successful launch of the goods. Hence the proper planning should be done before the goods are released in the market. A thorough research should be carried out and then only a distribution strategy can be formulated by keeping these factors in mind.