In today’s fast paced world, distribution by a company can be an enormous competitive advantage to the company. Most companies target their customers far and wide. Because of the rising costs, companies are trying to expand in various markets so that they have a higher turnover and hence a higher margin.
To reach far and wide, you need the right distribution strategies in place. You cannot market a product and then not deliver the product to the end customer. This is a sheer loss of money as you waste money on your marketing and the opportunity loss is also huge. Not to mention, the loss to the brand when the customer wants to purchase the product but cannot find it.
Thus, there is a lot of importance given to making proper distribution strategies for a company. This is also the reason why Place (Which majorly consists of distribution) is one of the major 4P’s of the marketing mix. Place is considered in case of products as well as services.
Distribution strategy is mainly decided by keeping the top management in loop because it affects overall operations. This strategy can be summarised with 3 main points.
How to get the product from the manufacturing point to the end customer.
How to control costs and save time while executing the distribution strategy
How to build a competitive advantage through distribution
On a macro level, there are two types of distribution.
1) Indirect distribution
Indirect distribution is when the product reaches the end customer through numerous channels in between. For example – The product goes from manufacturer to C&F, then to the distributor, then to the retailer and finally to the customer. Thus the chain is long.
2) Direct distribution
Direct distribution is when the company either directly sends the product to end customer or when the channel length is very less. A company selling on an e commerce portal or selling through modern retail is the form of Direct distribution.