CHAPTER 1: THE THEORETICAL FRAMEWORK OF DISTRIBUTION SYSTEM AND DISTRIBUTION CHANNEL MANAGEMENT 1.1
Overview about distribution and distribution channel 1.2.1
Concept, roles and purpose of distribution
Distribution is the process of making a product or service available in the right quantities and locations when customers want them, using direct means, or using indirect means with intermediaries. (Willam D. Perreault)
It’s a movement of goods and services from source through a distribution channel, right up to the final customer, consumer, or user, and the movement of payment in the opposite direction, right up to the orginial producer or supplier. (Business dictionary)
William D. Perreault, Jr, PhD, University of North Caroline. Essentials of Marketing – A marketing Strategy Planning Approad, 12 edition, pp 248. *
Globalization of markets is a phenomenon that has received much attention and been extensively debated both at the general societal/ institutional / cultural levels and at market and business levels. In any globalization process, distribution of goods and services between and within local industrial and consumer markets is of great importance. Globalization of markets and reoganiztion of distribution are mutually dependent processes that involve changes in market strutures.
As national market expand and as new opportunities arise for satisfying consumer demand, greater specialisation in distribution is evident both in level of distribution and in goods and service handled (Mallen, 1996). Distribution excellence has become a powerful source of competitive differentiation. In the 1980’s and 1990’s at USA, companies began to view distribution channles as more than simply a source of cost savings and recognize it as a source of enhancing product or serve offerings as part of the broader supply chain process to create competitie advantage. Distribution builds stable competitive advantages. (Mentzer et al, 2004).
Mallen, B.,(1996). Selecting channels of distribution: a multistage process. International Journal of Physical Distribution & Logistics Management, Vol.26, pp.5-21. *
Mentzer, J.T., Min, S., and Bobbitt, M.L.,(2004). Toward a unified theory of logistics. International Journal of Physical Distribution & Logistics Management, Vol. 34, pp 606-627. 126.96.36.199
Purpose of distribution
All marketing managers want to be sure that their goods and sevices are available in the right quantities, to the right locations and at the right time, as well as to minimize systemwide cost while satisfying the service levels their customers require. But customers may have a different needs in these areas as they make different purchases. 1.2.2
The distribution channel
The distribution channel concept
A distribution channel is the path through which goods and services travel from the vendor to ther consumer or payments for those products travel from the consumer to the vendor.
A channel of distribution is any series of firms or individuals who participate in the flow of products from producer to final user or consumer.
* http://www.businessdictionary.com/definition/distribution-channel.html * William D. Perreault, Jr, PhD, University of North Caroline. Essentials of Marketing – A marketing Strategy Planning Approad, 12 edition, pp 248 188.8.131.52 Fuction of distribution channels
* Distribution channels transfer goods and services from vendor to customer, it can fill the distance in time, space and ownership between those who use them. * Information: Collect and distribute the necessary information about the environment, current and potential customers, the compettions .i.e . It helps to makes the appropriate...
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