Distribution, in broad terms, is the way in which you make your goods or services accessible to potential buyers. In simple terms, you sell directly to the consumer. There are no warehouses, no stores, no middle men, and no so on. In a broader sense, then, distribution management also refers to sales management, which is concerned with the entire process by which sales are increased or decreased, and the methods by which this is achieved. Sales management is often considered the part of product distribution strategies, as sales management is what brings in new customers and keeps existing customers coming back. Therefore, both distribution management and sales management are closely related, and the two are often used together.
Mass distribution process requires the existence of a distribution strategy.
This process involves large numbers of consumers, and it is usually carried out on a regional, district, or national level. This type of distribution involves the largest number of individuals and the most varied range of products. Large scale mass distribution can be difficult, sometimes, for various reasons, such as distance from the manufacturer, poor fuel infrastructure, and the difficulty of transporting large items over long distances. However, mass distribution strategies, like retail sales, are relatively easy to implement.
Small-scale distribution management involves the distribution of a small selection of the product.
Small scale distribution involves a smaller number of retailers, and the number of retailers involved will depend on the size of the community, and on the preferences of the retailer. The most popular medium for small scale distribution involves road freight, because it is extremely fast, very convenient, and relatively inexpensive. Small distribution channels can also include air freight and courier services. Some distribution channels involve multiple stages of distribution.
The role of market penetration.
This is the term used to describe the percentage of the population that can physically purchase the product. Market penetration can be either direct or indirect. Direct market penetration strategies involve contacting the end users directly, while indirect market penetration strategies involve building business relationships with customers, and then reaching them indirectly through a distribution channel. There are different types of market penetration strategies, including point-of-sale, membership, fee-based, and network marketing.
There are many factors that affect the costs and profit of a small business.
Some of the more important factors are the costs of raw materials, overhead costs, rent or leasing space, machinery or equipment, marketing expenses, and the cost of sales force, such as payroll and benefits. In some cases, the most efficient product distribution strategies involve combining all of these factors, such as with the application of technology. There are four basic distribution models, each with its own advantages and disadvantages.
A good sales team leads the way to success.
This is perhaps the most important of all distribution management strategies. Good sales teams build customer loyalty by consistently exceeding the customer satisfaction expectations that the product deserves. However, a bad sales team does just the opposite. Such a team makes assumptions that are not backed up by sound data or effective sales tools.
There is a great demand for experienced professionals in the field of sales management, distribution management, or product distribution. There is always a demand for sales managers, distribution managers, product manufacturers, and product distributors. In order to achieve success in any type of distribution management position, one needs to be adept at building an effective team that is capable of managing multiple distribution channels. Such team members must also be highly motivated and focused.
Retailers are a key point in any distribution channel strategy.
One of the most important elements involved in effective product distribution management is the ability to work with different types of retailers.
Retailers are different from other businesses in many ways. One such difference is the fact that retailers have customers that come in the door. Unlike most businesses that do not have customers in the door, retailers are required to have a certain level of interaction with customers to increase customer loyalty and repeat sales. Thus, the definition of effective distribution includes having a happy medium between customers who come in the door and those who do not.
Product distribution strategies should also include the ability to work with change.
Retailers are often confronted with sudden changes in their marketing plans and product mix. The introduction of new products or the addition of new distribution channels can require quick adjustments to distribution processes and business practices. Retailers should be capable of making changes quickly and must have the necessary staff in place to manage these changes.
Profit margins of the company and why are they important?
Finally, any good product distribution strategy will consider the profit margins available to the company. It is important to consider the potential costs associated with distribution. Some distribution models can be very expensive and may not provide a substantial profit for the small business. Other distribution strategies can be very profitable, but the implementation may require additional resources and time. Creating a distribution strategy should first take into consideration the needs of the company, including the type of product and the amount of time and effort required to create a distribution strategy that will be profitable and efficient for the small business.