Logistics & distribution channel

Laura Baranda González 5° MKT

• The process of planning, implementing and efficiently

control the flow of materials, storage, in-process inventory,

finished products and relevant information from the point

of origin to point of consumption, at the lowest possible cost.

Laura Baranda González

• Series of activities that must be met to achieve the objectives.

• It is an information sistem.

• It can be as large or as small as the company wants.

• All activities are equally important.


• Established by E. Grosvenor Plowman.

Right product

Right place

Right time

Right condition

Right cost


Customer service Comunication Transport Inventory

control

Shopping Handling

returns Storage Plant and

warehouse location


Demand forecasting

Warranties & service. Waste &

scrap Packing

Reverse

logistics

Purchase orders. Material handling.


• Distribution is the bridge between producers and final

consumers.

• There are four stages of the distribution:

1. Periodic markets.

2. Permanent markets.

3. Fragmented markets.

4. Integrated markets.


Periodic markets.

• From the origin to the Middle

Ages.

• Barter.

• Merchants have their fairs

and markets and religious

festivals.

Permanent markets.

• Modern age.

• Geographic markets.

• Markets settled permanently

in certain cities.


Fragmented markets.

• Industrial Revolution.

• They specialize merchants.

It eliminates the producer-

trader.

• Focused on production or

distribution.

Integrated markets.

• Crisis of 1929.

• Distribution structure.

Integration of the

different forms of

distribution.

• Producer, wholesaler and

retailer.


• People or organizations that get products from manufacturers

to the consumer. Own the product at the time and facilitating

the transfer of ownership of the product.


Storage

Financing

Provider search

Consumer

search

Price equilibrium


Product approach

Promotion

Obsolescence &

deterioration risk

Services.

Packaging of


Wholesalers.

• Purchase products for resale.

Commercial.

• Products purchase for resale.

Retail or retailer.

* Purchase products for resale.

Agents & brokers

• Never own products, but the transfer of rights.


a) Determination of prices.

b) General conditions of sale.

c) Definition of the geographic area.

d) Specification of all the details.


• It requires a well-organized method for designing channels

that satisfy customers and overcome competition. There are

4 choices:

1. Specify the distribution function

2. Select the type of channel.

3. To determine the intensity distribution

4. Select specific members of the channel.


• a channel strategy should be designed within the context of

the overall marketing mix. It reviews the objectives

of marketing.


• After specifying the distribution function of the overall

marketing program, we choose the most suitable channel for

the company's product


a) Intensive Distribution : Is the case with these types of products that are found everywhere, such as cigarettes.

b) Exclusive distribution: it is characterized by the granting of exclusive product distribution to a few distributors, geographic boundaries, but with the express condition that such dealers refrain from selling competing products, as expected.

c) Selective distribution: it combines the advantages of the previous two, and although it provides a relative weakening of controls that aspires all products, it is also very true that reduces the costs of marketing the products.


• Certain companies choose to distribute

the product, since there are often many

companies to choose from.


a) Market factors. • Type of market. • Number of potential buyers. • Geographic concentration of the market.

b) Product factors. • Unit value. • perishability. • technical nature of a product.

c) Company factors. • Desire to control the channels. • Services given by the seller. • The ability of executives. • Financial resources.


• Mitigate the conflict or at least its negative effects. • Increase control of the company within a channel.

Horizontal conflict.

• It takes place between companies located on the same level of distribution.

Conflict between producer & wholesaler.

• Manufacturers believe that wholesalers do not promote the product aggressively and maintain sufficient inventories.

• Services cost too much.

Conflict between producer & retailer.

• Likely to intensify in times of economic crisis.


Manufacturers can:

• Create a strong brand loyalty

• Establish one or more forms

of vertical marketing system

• Refusing to sell to dealers

who do not cooperate.

Retailers can:

• Create loyalty to the store

• Improve the computerized

information systems


• Exclusive markenting.

• Restrictive contracts.

• Refusal to distribute

• Policy exclusive territory.


Exclusive marketing.

a) The manufacturer's sales volume

b) Contract

c) It has been determined that the

exclusive distribution is

permissible when:

• There are equivalent products.

• A manufacturer is entering

the market and its total is so small

as to be negligible.

Restrictive contracts.

It is permissible when:

• A new company is trying

to enter a market.

• An exclusive distributor is

obliged to sell the full line of

products from the manufacturer,

but is not prohibited

from selling the competition.


Refusal to distribute.

• provided to select the

channels, a

producer may refuse to sell.

Policy exclusive territory.

Are permitted when: • A company is small or just entering the market. • A manufacturer establishes a corporate vertical marketing system. • A manufacturer uses independent intermediaries.

•


• Product distribution (range).

• Distribution channel selection

• Discrepancies.

• Channel functions

• Channel structure.

• Selection, Administration, Logistics and Marketing.


Product distribution (range).

• This can be:

•Vertical (control functions

from start to finish)

• Horizontal (very limited, it

combines institutions at the

same level of operations)

Selection of the distribution channel.

• Coverage of the market: size and potential market value of the desired supply.

• Control: a short channel is better because it provides more control.

• Costs: distribution are lower when no intermediaries in the channel.


Discrepancies.

• Represent additional costs

of planning

• In many

• Assortment

• Temporary

• In space

Channel functions.

• Transaction (monitoring)

• Logistics (Infrastructure)

• facilitation (marketing)


Structure of the channel.

• It is different for each type of product. Other options. (Alternate Channel) • Multiple Channel • Channel nontraditional • Reverse Channel • Strategic alliance channel • Global Marketing Channel

Selection, Administration, Logistcs & Marketing.

• Balance, service and cost • Physical Distribution • Price / Cost • Economy of scale • Utilities • Standards • Planning • Inventories / turnover • Auctions • Seasonality

•


• Logistics allows to create strategic alliances in order to join

forces, bringing the best of each company and thus provide a

better service.

• Logistics is a competitive advantage for businesses, so each day

more and more companies make use of it, but also requires

technology to improve the information system.

• Logistics brings benefits to both, customers and the company,

customers get what they want, whenever they want at the price

that suits them, in the meantime companies save costs.


• It is important to use distribution channels as these help us to make work more efficient, but also requires an analysis of the best structure to carry it out.

• Distribution channels save time and money to businesses and customers, using them can be the key to success, a strategy based on logistics should be well planned.

• Logistics is a series of activities that guide the company on the right track, primarily deals with the distribution of a product or service.


Logisctics & distribution channel.


Business

Logistics & distribution channel