Distribution Strategies are the planning and procedures required for the growth and development of an organization. Distribution strategies assignments need proper studies of all the strategies required in the company. Every company or organization needs to develop different types of distribution strategy to have a high earning capacity and high popularity in the market.
Every product needs various types of resources and energy for its manufacturing and finishing. This finishing is required for the proper distribution of the product in the market. A lot of money is spent on the marketing of the product also. If there is not any proper distribution system, there will be a huge loss to the company in terms of money, customers, marketplace, and repute.
Distribution strategy is a decision taken by the top management. It is very important as it affects most of the operations of the organization. The strategy has three main points of working. These may be as follows:
- How do we get the product from origin to the end user as quickly as possible? This refers to the variety of people involved in the distribution of the products and services.
- How do we control the costs and save time while implementing strategies for distribution? It refers to the cost reduction strategies and time-saving strategies by which we can have quick production methods.
- How do we get a competitive advantage through better distribution? It refers to the measures taken by the company to gain its popularity in the market about its products.
Types of Distribution System
- Direct Distribution System: A direct distribution system means that there are very fewer channel partners for the distribution of the product. The manufacturer is directly linked to the customer either by online e-commerce system of by the modern retailing system. It ensures fast distribution of the product to the customer.
- Indirect Distribution System: An indirect distribution system contains numerous channel partners for the distribution of the product. More will be the channel partners; more will be the length of the chain. The various partners are as follows; the manufacturer, C&F partners, distributor, retailer etc. Hence it takes a lot of time for distributing the product to the customer.
- Intensive Distribution System: This is a system of distribution which tries to cover as much market as it can. It is applied when the company is having a product meant for mass market. Most of the FMCG and consumer durable products fall in this category.
- Selective Distribution System: This is a distribution system employed by big brands. These brands have exclusive products and have a popular name. So these companies have fewer outlets and the sale is the name itself. In big cities, these brands may have 4-5 outlets at the maximum.
- Exclusive Distribution System: This system of distribution is applied to very costly and exclusive products. There are very few outlets of these products even in the whole country. Probably there might be a single outlet within a range of 5-7 cities. There may be a single distributor for a single country as the product is famous worldwide.
So, to conclude we can say that a distribution strategy is a special plan made by the top management of a manufacturing company which defines the methods for the distribution of products to the channel partners of the consumers.
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