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

Warranties & service. Packing Reverse Waste &
logistics scrap

Purchase orders. Material handling. Demand forecasting


• 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. Permanent markets.
• From the origin to the Middle • Modern age.
Ages. • Geographic markets.
• Barter. • Markets settled permanently
• Merchants have their fairs in certain cities.
and markets and religious
festivals.


Fragmented markets. Integrated markets.
• Industrial Revolution. • Crisis of 1929.
• They specialize merchants. • Distribution structure.
It eliminates the producer- Integration of the
trader. different forms of
• Focused on production or distribution.
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.


Consumer Storage
search

Provider search

Price equilibrium
Financing

Product approach
Services.

Obsolescence &
deterioration risk

Packaging of Promotion


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. Conflict between producer & Conflict between producer &
wholesaler. retailer.
• It takes place between • Manufacturers believe that • Likely to intensify in times of
companies located on the wholesalers do not economic crisis.
same level of distribution. promote the product
aggressively and maintain
sufficient inventories.
• Services cost too much.


Manufacturers can: Retailers can:
• Create a strong brand loyalty • Create loyalty to the store
• Establish one or more forms • Improve the computerized
of vertical marketing system information systems
• Refusing to sell to dealers
who do not cooperate.


• Exclusive markenting.
• Restrictive contracts.
• Refusal to distribute
• Policy exclusive territory.


Exclusive marketing. Restrictive contracts.
a) The manufacturer's sales volume It is permissible when:
b) Contract • A new company is trying
c) It has been determined that the
to enter a market.
exclusive distribution is
permissible when:
• An exclusive distributor is
• There are equivalent products. obliged to sell the full line of
• A manufacturer is entering products from the manufacturer,
the market and its total is so small but is not prohibited
as to be negligible. from selling the competition.


Refusal to distribute. Policy exclusive territory.
• provided to select the Are permitted when:
channels, a • A company is small
producer may refuse to sell. 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.


Selection of the distribution
Product distribution (range). channel.
• This can be: • Coverage of the market: size
•Vertical (control functions and potential market value of
from start to finish) the desired supply.
• Horizontal (very limited, it
combines institutions at the • Control: a short channel is
same level of operations) better because it
provides more control.

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


Discrepancies. Channel functions.
• Represent additional costs • Transaction (monitoring)
of planning • Logistics (Infrastructure)
• In many • facilitation (marketing)
• Assortment
• Temporary
• In space


Selection, Administration,
Structure of the channel. Logistcs & Marketing.
• It is different for each • Balance, service and cost
type of product. • Physical Distribution
Other • Price / Cost
options. (Alternate Channel) • Economy of scale
• Multiple Channel • Utilities
• Standards
• Channel nontraditional • Planning
• Reverse Channel • Inventories / turnover
• Strategic alliance channel • Auctions
• Global Marketing Channel • 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.


Logistics & distribution channel

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