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STUDENTS' CORNER - 158

Distribution takes care of delivery of products ordered.

 

Distribution connects the producer of the product and the consumer of the product.  Without the consumer, no business is possible and in a way, he decides the volume of the business including the other features like design and packaging. Consumer is the king of the market. Of course, between the producer of the product and the consumer, there are many intermediaries who are inevitable in the channel of distribution.

Distribution to be effective must deliver goods to all stakeholders in right time, in the right place and in the right quantity without any damage to the goods.

Delivering the goods in right time brings in many advantages. First of all, the customer is satisfied that he has received the goods in right time in the sense that his need for it can be fulfilled as he wished. Additionally, it reinforces the brand image of the company because it makes the customer feel that the company has responded correctly to the customer since it values the customer.

Nothing damages the name of the company than a delivery of goods in a wrong place. And no blame should be laid at the door of the customer at any cost, generally. Verification of the address is a valid measure because the place is the final destination in the journey of the product.

So also the right quantity: Quantity is not just the number but it also includes correct packaging. Very often, a good packaging leaves a good impression on the mind of the customer.

Distribution has some more tangible benefits. It creates job opportunities. It is said in distribution is involved a huge number of graduates and even post-graduates in international food delivering companies like Zomato. In catering domain, the distribution of food items ordered under home-delivery mode has been gaining popularity which means business for the catering organisation is on the increase. Flipkart and Amazon are reputed examples that solely depend on the efficient supply chain which functions effectively in distribution.

As for the types of distribution, there are two major types of distribution: Direct and Indirect Distribution.

As the term itself indicates, in direct distribution, the manufacturer sells the products directly to the customers. Of course, initially, establishing effective direct distribution may require some additional investment in terms of, say, warehouses, transport and also delivery staff. But once this direct channel of distribution is established, it is likely to prove less costly.

Though direct distribution may prove challenging on a large scale, it helps establish reliable connection with the customers which is vitally significant for any business enterprise.

In Indirect Distribution, there will be intermediaries and it implies that a careful selection must be exercised in choosing intermediaries. And it increases; it has to, the cost to the customers.

 

Having seen the basic points in the drivers of supply chain, we shall move on to focus on customer and the environment.