Distribution Management.pptx

Participant handbook

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©SafeducateAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted orcopied in any form or by any means, electronic, mechanical, photographic or otherwise, without the priorwritten permission of the author and the publisher. Unauthorized possession of the material or disclosure of theproprietary information may result in legal action. All disputes are subject to the Jurisdiction of Courts at NewDelhi.All Trademarks & Trade names acknowledged.First published by Safeducate in 2014.Publishers: Safeducate

Safeducate Learning Pvt. Ltd.Transportation and distribution managementParticipant Guide

Safexpress Pvt. Ltd.For ITM University

MBA in Supply Chain management

Papers to be studied :1. Core Concepts of SCM2. Operational, Strategic & Implementation Issues in

Supply Chain Management3. Supply Chain Performance Metrics and Modelling4. Logistics Management5. Recent Trends in Supply Chain Management

Paper 2 : Logistics Management

Modules A. Introduction to LogisticsB. Functions & Types of LogisticsC. Transportation & Distribution ManagementD. Warehouse OperationsE. Logistics Performance & ParametersF. Transportation Problem and Network AnalysisG. Domestic DocumentationH. Freight Transportation SystemI. Information & Communication Technology in LogisticsJ. Reverse LogisticsK. IT Networking

Module : Transportation and distribution managementLogistics and TransportationModes of TransportationTypes of Distribution SystemsRetailing and Distribution Systems


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Distribution Management

Distribution Systems

Distribution systems is the path through which goods and services travel fromthe vendor to the consumer or payments for those products travel from the consumerto the vendor. A distribution channel can be as short as a direct transaction from thevendor to the consumer, or may include several interconnected intermediaries alongthe way such as wholesalers, distributers, agents and retailers.


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A distribution system or a marketing channel is a group of interdependentorganizations or service providers working collectively to make a product or serviceavailable to the end user.

Understanding Distribution Systems

A farmer in Srinagar has an apple orchard. Once the apples are ripened he sells theapples to an agent of Delhi. The agent collects the apples from Srinagar, packs them,and sells them to a wholesaler at New Delhi sabzimandi. The wholesaler thendistributes them to various retail fruit vendors throughout Delhi by selling smallerquantities. Finally, we purchase apples from those vendors as per our requirement.Thus, we find that while coming from the producer at Srinagar, the product reachesthe consumers by passing through several hands like an agent, a wholesaler and aretailer. All these three are called middlemen. These middlemen are connecting linksbetween producers of goods, on one side and consumers, on the other. They performseveral functions such as buying, selling, storage, etc. These middlemen constitutethe channels of distribution of goods. Thus, a channel of distribution is the route orpath along which goods move from producers to ultimate consumers.


AppleFarm Agent Wholesaler Retailer

Consumer


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Parties involved in a distribution system

Producer Agents Wholesaler

RetailerConsumer

DistributionSystems

WholesaleActivities Retail Activities

Brokers &Agents

MerchantWholesalers

Types of Distribution Systems

Full ServiceWholesalers

Limited ServiceWholesalers


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Wholesalers are one of the important middlemen in the channel of distribution whodeals with the goods in bulk quantity. They buy goods in bulk from the producersand sell them in relatively smaller quantities to the retailers. In some cases they alsosell goods directly to the consumers if the quantity to be purchased is more. Theyusually deal with a limited variety of items and also in a specific line of product, likeiron and steel, textiles, paper, electrical appliances, etc.

Wholesale Activities

Manufacturer Wholesaler Retailer


Types of Wholesalers

WholesaleActivities

Brokers &Agents

MerchantWholesalers




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The main function of these parties is to ease buying and selling to bring buyers andsellers together and to act as a negotiator between them. Brokers commonly found inreal estate, food/commodities and insurance industries. They neither take legalownership or physical possession of goods. They simply act as the purchasing agentin between the buyers and sellers.

Brokers agents, Advisors and Counselors


Merchant wholesalers are also known as jobbers, distributors or supply houses areindependently owned and operated organizations that acquire title of ownership ofthe goods which they handle and represent. They may be of full service wholesalersand limited service wholesalers.

Merchant wholesalers

MerchantWholesalers




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Full service wholesalers usually handle larger sales volume in a larger geographicalarea. They may perform a broad range of services for their customers such asstocking the inventories, operating and maintaining warehouses, supplying creditlines, employing sales people to assist and service customers and delivering goods tothe customers. They may be of two types:

Full Service Wholesalers


General LineWholesalers

SpecialityWholesalers

Deals in:GroceriesToiletries

Food & Beverages etc.

Deals in:Wood

LaminatesCigarettes


These types of retailers offer limited types of services to their customers, and serveto reduce the cost of service. They includes:

Truck wholesalersThey deliver the service directly from their truck or vehicles, often for cash. Forexample Amul delivering milk and milk products to the retailers.

Cash and carry wholesalers:Carries limited line of fast moving goods selling to smaller retailers on a cash onlybasis.

Drop ShippersThey do not carry inventory or handle the merchandise. They take the ordersand transfers customer orders and shipment details to the manufacturer, who thenships the goods directly to the customer.

Limited Service Wholesalers


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Retailing activities are the final step in the logistics and Supply chain distributionchannel which connects the bulk producers to the ultimate users. Retail trade is theprocess of buying goods or services with the objective of reselling it. Retailers Buysgoods from different wholesalers in bulk quantities and sells it to consumers in smallquantity.

Retailing Activities

Retailer ConsumerWholesaler

Types of Retailers

Retailing involves selling directly to the consumers for their personal, non-commercial use. It can be of personal selling, through telephone, T V, shop selling orany other use. Broadly, the organized retail sector can be divided into two categories.

Retailers

In store Retailers Non StoreRetailers

RetailOrganizations


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Types of Retailers

Retailing involves selling directly to the consumers for their personal, non-commercial use. It can be of personal selling, through telephone, T V, shop selling orany other use. Broadly, the organized retail sector can be divided into two categories.

In store Retailers

DepartmentStores

Chain Stores Mail Order StoresDiscount Stores

Super Markets

Types of Retailers- Departmental storesDepartmental stores carry a wide variety of goods under one roof in differentdepartments. These departments handles different categories of goods likehousehold goods, clothing etc. Departments in each store is operated separatebusiness entities.

Chain Stores

Mail order houses

Super Markets

Discount Stores

Departmental stores


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Types of Retailers – Discount StoresSelling merchandise less than the manufactures listed price is known as discounting.A discount store is a type of department store, which sells products at prices lowerthan those asked by traditional retail outlets. But now a days traditionaldepartmental stores are also offering good discounts to compete with them.

Chain Stores

Mail order houses

Super Markets

Discount Stores

Departmental stores

Chain stores are retail outlets that share a brand and central management, and usuallyhave standardized business methods and practices. Before considered a chain, storesmust meet a litmus test; it must have more than 10 units in 2 or more distinctgeographies under the same brand and have a central head quarters. These shops havesimilar appearance established in localities, spread over different parts of the country.

Chain Stores

Mail order houses

Super Markets

Discount Stores

Departmental stores

Types of Retailers – Chain Stores


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Mail order is a term which describes the buying of goods or services by mail delivery.The buyer places an order for the desired products with the merchant through someremote method such as through a telephone call or web site. The products are typicallydelivered directly to an address supplied by the customer, such as a home address.

Chain Stores

Mail order houses

Super Markets

Discount Stores

Departmental stores

Types of Retailers – Mail Order Houses

A supermarket, a large form of the traditional grocery store, is a self service shopoffering a wide variety of food and household products, organized into aisles. It islarger in size and has a wider selection than a traditional grocery store, but is smallerand more limited in the range of merchandise than a hypermarket or big-box market.

Chain Stores

Mail order houses

Super Markets

Discount Stores

Departmental stores

Types of Retailers – Super Markets


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Non-store retailers

Non- store Retailers

Direct Selling Automatic Vending TelemarketingDirect Marketing

Some retailers do not operate through specific stores and these types of retailing aremuch popular and developing than store retailers. The important class among them areDirect Selling, Direct Marketing and Automatic Vending.

Direct SellingDirect selling may be defined as, "The direct personal presentation, demonstration, andsale of products and services to consumers, usually in their homes or at their jobs.Direct selling is the marketing and selling of products directly to consumers away froma fixed retail location. Peddling is the oldest form of direct selling. Modern directselling includes sales made through the party plan, one-on-one demonstrations, andother personal contact arrangements as well as internet sales.

Types of Retailers – Non-store retailers


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Direct MarketingDirect marketing is the direct contact between the seller and the customer for thetransactions. This form of business allows organizations to communicate straight to thecustomer, with advertising techniques that can include cell phone text messaging,email, interactive consumer websites, online display ads, database marketing etc.


Automatic VendingIn automatic vending electronic machines are used to disperse a product to theconsumer after a certain amount of money has been put into the machine.Vending machines are commonly used to disperse beverages and snack items, but inrecent years companies have introduced vending machines that disperse other items,even including electronic items such as digital cameras or iPods.



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Tele-MarketingTele-marketing is a method of direct marketing in which a salesperson solicitsprospective customers to buy products or services, either over the phone or through asubsequent face to face or Web conferencing appointment scheduled during the call.Telemarketing can also include recorded sales pitches programmed to be played overthe phone via automatic dialing. Telemarketing has come under fire in recent years,being viewed as an annoyance by many.


Bibliography


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Bibliography

1. S K Bhattacharya, Logistics management, Sultan Chand Publications New Delhi

2. S. Suddailamuthu, S. Anthonyraj- Logistics Management for InternationalBusiness, Sultan Chand Publications, New Delhi

Documents

Distribution Management.pptx