Distribution Network in Manufacturing Industry
Distribution Network in Manufacturing Industry
Chapter One of Distribution Network in Manufacturing Industry
INTRODUCTION
Distribution treats an aspect of the activity area of marketing that has been conceptualized into the marketing 4P’s. it serves as the bridge between the producers and the prospective or potential consumers. It is therefore an important element in marketing mix, which dictates the movement of goods or services from the point of production to the point of use or consumption. It spreads its tentacle on both the movement of raw materials as well as that of finished goods.
Distribution is of a great economic, significance in marketing because of the huge expenses involve.
It is of a great importance in an organization from its importance in marketing field, it goes a long way in determining not only the price of goods but also the success of any marketing activities.
Also, from the purchasing perspective, distribution helps the buyer of a company for the consignment of goods from the buying point to the usage point.
As one would know, distribution cost differs via its transportation and storage depending upon the method of transportation used, length and complexities of the journey, amount of handling and protection required.
Clearly, the more the homogeneity of the cargo (goods) and the large the bulk for delivery at one point, the lower the unit cost incurred, which as a result makes many company to widen the scope of their middlemen and agent. The followings are the gap between the manufacturer and the end user(s).
1. Where production is concentrated in a few location but consumer widely scattered.
2. Where production is usually most economical as a continuing process, but purchasing by customers may occur at intervals, be seasonable biased or subject to peaks or other reasons.
3. Economies in large scale production, but customers often choose to buy in small quantities at a time.
4. Lack of awareness of consumer to the sources of the goods they need and certainly would be unable to acquire them from their source. Therefore, it is the function of distribution to fill these gaps in order to create place, title and time utility.
The greatest advertisement cannot sell a product which is not in the store because distribution system has broken down nor will advertising convince people to buy, product which the consumers feels cost too much, poorly packed or in some other ways do not live up to expectations. It is therefore paramount that the understanding and practice of distribution is the satisfaction of consumer.
Moreover, production is not complete until the goods are in hands of the final consumer, hence, distribution begins with the producer and ends with ultimate consumers. Between these two personalities, various institutions that are responsible for this channel. The distribution institution is subdivided into merchant, middlemen and the agent, which the former take title of goods and act independently while the other act dependently on its principal.
This method is to achieve an efficient system that provides an acceptable level of customer services that do not involve the firm in eradicative distribution cost, that the role of distribution is to optimize the value of a product by making it available at the various retail outlets, where the customers normally expect to be able to avail themselves to it.
AIMS AND OBJECTIVES OF THE STUDY
There are numerous objectives of carrying out this research work, essentially the principal objective is to evaluate the effective distribution and its impact on sale in manufacturing company.
Furthermore, the study is aimed at:
· Knowing various tentacles of distribution that is available for the transfer of both consumer and industrial goods and services.
· Finding out most relevant channel of distributing goods for an organization manufacturing companies.
· Finding out various means of distributing goods of an organization.
· Recommending a more systematic, purposeful and consumer oriented method of distribution that will increase the sales volume of an organization.
· Finding out what the organization will benefit from applying effective distribution network.