Influencing Factors Of Distribution Efficiency And The Improving Strategies: A Case On Unilever Ghana

Influencing Factors Of Distribution Efficiency And The Improving Strategies: A Case On Unilever Ghana
Abstract
Even though this day direct marketing system grows, most producers still do not sell their products directly to final users. Between them and consumers lie marketing intermediaries which bridges the gap between user and producer, in connecting customers and products. The growth and the increasing importance of distribution channel in recent years and having efficiently performing distribution channels can be considered a competitive advantage for manufacturers. Therefore, evaluating performance and efficiency of distribution channels and problems that are or might exist with this regard is very essential. Only limited numbers of studies in Ghana are concerned with investigating the performance of distribution channels.
This study investigates the factors affecting distribution efficiency and the improving strategies a case of Unilever Ghana. Four determinants: competence and experience, financial and facility capacity, availability and delivery of product and selling capacity have been kept in mind while doing this research. The study used quantitative Methods and descriptive research design techniques in which 144 respondents from Accra were included. In this study structured questionnaire for key account customers, Sales representative, Area sale manager and Distributors identified through descriptive and explanatory research approach was used. The researcher used Pearson’s correlation and regression analysis to analyze the data. The result of the study shows that all four variables; competence and experience, financial and facility capacity, availability and delivery of product and selling capacity has a significant influence on distribution performance of the firm with different degree.
The study suggests that focusing on these distribution performance variables could further reduce the probability of default while distribution performance. or Unilever products.
Chapter One
Introduction
1.1. Background of the Study
Production is the creation of goods and services and these goods and services can be produced in factories or industries and stored in warehouses. However, production cannot to be said to be complete until the products/services get to end user or consumer. This can be obtained through the distribution process and that completes the production cycle. One of the components of marketing mix is the task of transferring product from production place to purchase place for the customer, thus the main task of distribution management is placing goods in the hands of potential customers at the right time and place (Roosta et al. 2009). Distribution channels can be described by the number of channels involves. A layer of intermediaries that perform some work in bringing the product and its ownership closer to buyer is channel level (Kotler, 2004).
Any organization to be effective there should be effective distribution management process to convey finished products from the manufacturer to the final consumers. This is because without having standardized distributor the best product will not be delivered and the marketing mix will break down and fail (Ferguson 2000).
In the theory of marketing mix, place (distribution) determines where the product will be sold and how it will get there (Kotler, 2000). Griffith and Ryan (1996) hold that distribution channels evolved through the utilization of national resources contained within an area of trade. The need to move the resources to other areas where they were in demand brought about the need for distribution channels. A channel of distribution comprises a set of institutions which perform all of the activities utilized to move a product and its title from production to consumption.
Consumers today are more environmentally conscious than ever. However, it has been found that there is a gap between the consumer’s intention and actual purchase when it comes to products that there is a social pressure to buy for environmental reasons. The potential for the socially desirable segment is estimated to have potential, but growth seems to be slow.
1.2. Statement of the Problem
The activities . in a company with great diversity of customers spread over vast geographical areas thus must integrate the systems components of distribution to achieve an acceptable customer service level and avoid reduction of market share (Bowersox, 2008). This therefore explains the problem of getting the right quantity of the right product to the right place at the right time and at the least cost possible. This challenge has confronted companies with issues such as meeting delivery due dates and operating an efficient distribution network. Geographically imposed gaps between firms and their potential consumers is bridged by distribution, as physical distribution uses its transportation function to provide time and space utility between these two parties (Bowersox & Closs, 2010). Based on the survey conducted by various departments within the firm conducted during 2017–2018 half fiscal year market survey result; it was seen some indicators that Insufficient supply of product to the channel members during pick season by the company, unavailability of product as per end-user request, inconsistent selling capacity of channel members, inconsistent assessment of channel members by the company distributor representatives, and inadequate finical capacity of distributors for re- stocking items or products was a straggle (CCBA Knowledge and intimacy, route to market survey June, 2018). In the same report distribution is becoming a more imperative issue in company accounts as the cost of transportation, warehousing and stockholding are growing relative to the costs of other industrial inputs. Marketing efforts, such as the extension of product lines and penetration of new marketing channels into new markets, were imposing increasing strain on distribution systems, making them more complex to manage and more expensive to operate (McKinnon, 2009). In the emergence of these marginal problems, there is the fact that there are so many brands of consumer goods in the market from which the consumer has to choose from with little or no attention to difference among them in terms of quality and other characteristics.
As Yang (2013) pointed out a good design of a distribution network could achieve a number of logistics and supply chain goals, ranging from low operational cost to high customer service level. Thus, to plan, design and select and use the most efficient and effective channel of distribution in which to place a product into the hands of the customer is very important for such market leading manufacturers like as Unilever producer, Unilever Ghana.
Keeping in view the above discussion, the researcher focus to conduct a research study in which the most important factors that can affect distribution performance. will be identified and analyzed. As per the data fetched from 2017–2018 half fiscal year distribution to end user become decreasing as per the previous years, that’s is the main gap the researcher would like to address why distribution network declining? Moreover, the gap identified during the literature review by the study is that limited researches have been done to evaluate factors that affecting distribution performance. Therefore, the researcher is motivated to undertake this research and fill the gap.
1.3. Research Questions
- What magnitude of competence and experience channel members have in the area of distribution system distributing/selling Unilever products to their customers’/end user and their influence on the company sales performance in product distribution?
- What degree of financial and facility capacity channel members align with company target to fulfill end-user needs in terms of Unilever products?
- What extent channel members selling capacity performances affect company’s sales performance of the company?
- What magnitude of channel members’ availability and delivery of product affect customer satisfaction of getting product and as per the target of company product distribution system?
1.4. Objectives of the Study
1.4.1 General Objective
The main objective of this study is to critically examine factors affecting distribution efficiency and the improving strategies taking the case of Unilever Ghana on selected cities in Accra.
1.4.2 Specific Objective
The specific objectives of the study include the following:
- To examine channel members’ competence and experience in the area of distribution system distributing/selling Unilever products to their customers’/end user and their impact on the company sales performance in product distribution
- To evaluate how financial and facility capacity of channel members align with company target to fulfil end-user needs in terms of Unilever products
- To examine channel members selling capacity performances affecting company’s sales performance of the company
- To assess channel members’ availability and delivery of product as per customers getting of the product and the company product distribution system
1.5. Research Hypothesis
Based on the research question and the background of the study earlier mentioned, the study developed the following hypothesis for later testing:
- H1: Competence and Experience of channel members has an influence in the area of distribution system distributing/selling Unilever products to their customers and on the company sales performance in product distribution
- H2: Financial and Facility capacity of channel members has an influence on customers’ needs in terms of Unilever products
- H3: Channel members selling capacity performances has an influence on company’s sales performance of the company
- H4: Channel members’ availability and delivery of product has an influence on level of customer satisfaction and as per the company product distribution system
1.6. Significance of the Study
The study assumes significance in terms of its contribution to investigate the most crucial factors Affecting distribution performance. The study also helps to identify the effectiveness and efficiency of the distribution network system and to know the hindering factors and to improve the product distribution processes.
The finding of this research work are significant in several aspects. First, the results of this study have some practical value on distribution performance. in companies like as Unilever Company. The findings of this study will benefit the company in terms of understanding performance of its products distribution channels, in understanding how far the demand of customers fulfilled by the distributors, in comprehending existing gaps and factors that are affecting the performance of distributors and distribution system and how to improve the existing problems.
The researcher has a hope that the findings of this study benefit the company in understanding the current performance of its distribution channels, in comprehending whether customers that the distributors serving are satisfied in the distribution process and to improve gaps that might identified in this study.
Secondly this study will benefit researchers by highlighting current trends on distribution performance practices. Thirdly, the study will help by providing background material for future research in similar or in other sectors or industries, and anyone can or will use the findings for reference purposes in future related studies.
1.7. Scope and Limitations of the Study
1.7.1 Scope of the Study
The study has focused on factors affecting effective distribution performance. or Unilever products at the firm beverage Africa, which has 3 plants located in Dire Dewa, Bahir Dar and Accra, the researcher has focused only in the Accra branch plant official Unilever distributors, sales representative and there sales managers which are currently working on the company product distribution system which include making the product available, delivering customer service, giving advice and technical support, Even though stated distribution performance is determined by different factors, this study is confirmed on the factors affecting distribution performance of Unilever products.
1.7.2 Limitation of the Study
The scarcity of sufficient books and literature in the area of study was the major short coming that the researcher encountered during the execution of the study. The research was conducted also in all channel members found in Accra region and from distributors, customers, company sales representatives only. However, in distribution channels’, including but not limited to this only. It is very important to note that these limitations have been significant interference with the outcome of the study.
1.8. Definition of Key terms
1.8.1. Distribution
Distribution is the process of making a product or service available for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries. Or are the movement of goods and services from the 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 original producer or supplier. An order or pattern formed by the tendency of a sufficiently large number of observations to group themselves around a central value (Wren, 2007). The familiar bell-shaped curve is an example of nominal distribution in which the largest numbers of observations are distributed in the center, with progressively fewer observations falling evenly on the either side of the center (average) line. See also frequency distribution, nominal distribution, and standard distribution (Wren, 2007).
1.8.2. Channel
The channel function concept has already been extensively discussed by academics (Rangan et al., 1992). McCammon and Little (1975) argued that functions are considered to be the basic determinants of channel structure. That is, a system designed to carry out necessary tasks. Some researchers have discussed channel structure in terms of the function performed by channel members (Mallen, 1973). The basic idea was that channel functions could be allocated in different combination among various channel actors depending on the characteristics of the channel (Wren, 2007). Channel functions are categories of activities and services that add value to physical goods as they move from manufacturers to customers (Atwong and Rosenbloom. 1995).
1.8.3. Distribution Channel
Coughlan et al., (2006) defined a distribution channel as a set of independent organizations involved in the process of making a product or service available for use or consumption. The ultimate goal of a distribution channel is to bridge the gap between producers and consumers by adding value to products or services (Kim and Frazier, 1996). Typically, manufacturers, intermediaries (wholesaler, retailer, specialized) and end users are perceived as the key actors of distribution channel (Coughlan et al., 2006). Based on these definitions, it is not easy to determine where the distribution channel actually starts, since there might be multiple producers involved in manufacturing the final products at different levels. Some of these producers are close to the end at which raw material is supplied, while others are closer to the end that deals with final buyers or users.
1.8.4. Indirect Distribution Channel
The indirect channel is used by companies who do not sell their goods directly to consumers. Suppliers and manufacturers typically use indirect channels because they exist early in the supply chain (Aaker, 2001). Depending on the industry and product, direct distribution channels have become more prevalent because of the Internet. Distributors, wholesalers and retailers are the primary indirect channels a company may use when selling its products in the marketplace. Companies choose the indirect channel best suited for their product to obtain the best market share; it also allows them to focus on producing their goods (Aaker, 2001).
1.8.5. Direct Distribution Channel
A direct distribution channel is where a company sells its products direct to consumers. In this structure of distribution, a producer does not have to share its profit with intermediaries and so it is a low cost channel. The producer controls the whole marketing process and as a result can protect and maintain its brand image (Dent, 2011).
1.8.6. Competence Capability
Competence is the ability for performance within a role with the usage of ‘competencies’ as defined knowledge, skills, abilities, communication, technical skills, critical thinking, emotion, values, reflection and judgment, and causing an effective and superior performance outcome. (Cross, 2010). According to Kotonen et al. (2012, 22) and Baker et al. (1997, 266) competences describe the characteristics of an employee required to perform her tasks well.
Competences can be divided into individual and collective competences. Individual level of competences consists of knowledge, skills, attitudes and behavior, whereas collective level consists of collective team, process and organizational capabilities. Langdon & Whiteside (2004, 12) say that competencies include all the same characteristics as competences; skills, knowledge and attributes, but in addition to them also the ability of performing job tasks.
The definition of Shellabear (2002, 16) is very similar, stating that competencies are the specified skills, attitudes, behavior and knowledge necessary to fulfill a task. Often the ultimate purpose on competencies is to provide extra value for external customers.
According to Sanghi (2007, 10) idefines competency as a measurable, individual capability that distinguishes superior, effective accomplishment of a designated function according to a performance definition by an organization for its people; an interactive and complex combination of integrated attitudes, skills, knowledge and ability; behaviors and strategies; traits, motives, thought patterns, self-concepts, values and social roles.
1.8.7. Experience Capability
Key driver of improved performance is increasing cumulative experience. Organizations, teams, and individuals each develop routines for solving problems. Learning then consists of the process of exploring, selecting and replicating new routines for performance improvement (Nelson and Winter 1982; Zollo and Winter 2002). Thus, with increasing experience one may get better at executing existing routines and developing new ones.
The value of experience is also called into question by the idea of competency traps or core rigidities (Levitt and March 1988; Leonard-Barton 1992). These suggest that groups may become fixed in their way of doing things and that as conditions change, the group will not respond. This implies that experience may have a decreasing, or even negative, return when change enters a model. Staw (1980) also highlights the potential negative impact of experience as he suggests that skill increases with tenure, but effort and drive decrease over time, generating an inverted Ushaped relationship to performance.
In a review of the work experience literature Quinones, and Speer (1991) found that most studies used time on the job, or tenure, to measure work experience (e.g., McDaniel, Schmidt, &Hunter, 1988). However, other studies have measured experience by (countmgmenum1 Alley, 1989). Another approach has focused on the actual content of the experiences as a critical determinant of job performance (Mumford & Stokes, 1992). Finally, some have argued that individuals can differ in “lessons” they draw from similar experiences (McCall, Lombardo, & Morrison, 1988).
1.8.8. Financial Capacity
The ability to make financial decisions is an essential life skill, impacting the ability to effectively handle one’s property and financial affairs, and potentially increasing vulnerability to financial exploitation (Acierno et al., 2010; Laumann, Leitsch, & Waite, 2008; Lichtenberg, Stickney, & Paulson, 2013; Stiegel, 2012). Marson and others then expanded financial capacity to include a broader set of skills and activities needed for independent functioning in the community. These include performance and judgment, and vary from basic skills such as identifying and counting coins/currency, higher-level skills such as managing a checkbook, and more sions (Flint, Sudore, & Widera, 2012; Marson & Hebert, 2008; Marson, Triebel, & Knight 2012). Financial capacity in this conceptualization therefore involves not only skills around financial performance, but also sound judgment that optimizes one’s own interests and ability to follow values that generally guide one’s financial choices (American Bar Association Commission on Law and Aging & American Psychological Association, 2008.)
1.8.9. Facility Capacity
A facility capacity is an accumulation of everything needed for production of goods or delivery of services. A facility is an entity that facilitates the performance of any job. It may be a machine tool, a work center, a manufacturing cell, a machine shop, a department, a warehouse, etc. (Heragu, 1997). According to Tompkins (Tompkins et al, 1984): “Facility capacity determines how an activity’s tangible fixed assets best support achieving the activity’s objectives.” He believes that the following are elements that should be considered when designing a future facility: custom designed to meet customer needs, designed to facilitate time compression, flexible to allow adjustments to meet rapid market changes, ability to accommodate fast to market new products, focused for a small range of products, designed for a flat organization, planned at the lowest possible level, linking suppliers, manufacturing and customers, managed by a few “managers” facilitating decision making, training to adapt to change.
1.9. Organization of the Paper
This work is organized into five chapters: Chapter one deals with the introduction. This takes a look at the background to the study, statement of the problem, research question, objective of the study, research hypotheses, significance of the study, scope and limitations of the study as well as the organization of the study, Chapter Two deals with reviewing existing literature that primarily deals with discussions and review of literature related to the concepts of the research. The third chapter describes the methodology adopted for the study. This includes the research design, area of study, population, sample and sampling techniques, research instrument, administration of the questionnaire, and data analysis procedure. Chapter Four comprises compilation, analysis, and discussion of data collected from the fieldwork. Chapter Five also looks at the summary of the findings, conclusions, and recommendations.
Chapter Five
Summary, Conclusion and Recommendations
5.1. Introduction
From the analysis and data collected, the following discussions, conclusions and recommendations were made. The responses were based on the objectives of the study. The researcher had intended to obtain responses on factors affecting effective distribution performance. Unilever products among the customers, sales representative and area sale manager. The mean value of descriptive statistics the selling capacity, availability and delivery of product, competence and experience, financial and facility capacity are in the range of higher level and the variable distribution performance is in the level of moderate level.
According to the correlation matrix, all the Pearson Correlation coefficients are significant because all the significant value is less than the 5% level of significant. Therefore, the correlation between distribution performance against selling capacity, availability & delivery of product, competence & experience, financial & facility capacity is 0.847, 0.590, 0.515 and 0.514 respectively. The correlation between availability & delivery of product, competence & experience and financial & facility capacity to use is strong and positive and the correlation between selling capacity and distribution performance is strong and positive.
The overall regression model is significant. The value of R2 is .451 which implies that about 45.1% of variation in distribution performance is expressed in the variation on selling capacity, availability & delivery of product, competence & experience, financial & facility capacity
The coefficient results show that distribution performance is primarily influenced by selling capacity (β= 0.446), availability & delivery of product (β= 0.435), competence & experience (β= 0.269) and financial & facility capacity (β=0.227).
This figures tells about if the selling capacity, availability & delivery of product, competence & experience, financial & facility capacity is increased by one percent automatically the value of distribution performance can improve with 44.6%, 43.5%, 26.9% and 22.7% respectively. This implies that selling capacity is the most important predictor of the distribution performance. Availability and delivery of product also has a significant impact (β= 0.435) and appears to be the second determinant of distribution performance of Unilever products.
Moreover, perceived usefulness and perceived ease of use has an indirect influence, on risk, Intention to use, prior internet knowledge and conveniences on the adoption of internet banking Which indicated that perceived usefulness and perceived ease of use has both direct and indirect Influences on the adoption of internet banking.
5.2. Summary
The research aims at the factors affecting effective distribution performance. with reference to Unilever Ghana. Accordingly, to meet this objective, the researcher has developed a questionnaire from the relevant literature to collect and analyze the opinions of the study sample. The following findings are obtained;
Competence and Experience on the distribution performance of Unilever products
In relation to competence and experience, the view was that there exists a moderating influence on the distribution performance of the Unilever products in their company relative to another variable. With regard to competence and experience, the study found out that there exists influence of on the performance of Unilever products in their company and it would lead to an increase in distribution performance of coca products by a factor.
Financial and Facility Capacity on the distribution performance of Unilever products
The study findings revealed that on average the financial and facility was affirmed and this influencing the distribution performance of Unilever products in the companies. On the basis of these statistics, the study found out that there is a significant positive relationship between competence & experience and distribution performance of coca products of Unilever Ghana.
The findings revealed that on average the respondents were convinced that the financial and facility capacity are influencing the distribution performance of the Unilever products in their company. Financial and facility capacity would lead to an increase in distribution performance of coca products by a factor.
Selling Capacity on the distribution performance of Unilever products
The overall aggregate mean score for this variable was found to be high showing that on average the respondents were of the selling capacity of influencing the distribution performance of the Unilever products in their company. Selling capacity would lead to an increase in distribution performance of coca products by a factor.
Availability and Delivery of Product on distribution performance of Unilever products
In relation to availability and delivery of product, the view was that there exists high influence like selling capacity on the distribution performance of the Unilever products in their company relative to another variable. With regard to availability and delivery of product, the study found out that there exists an influence of on the distribution performance of the Coca Coca products in their company and it would lead to an increase in distribution performance.
5.3. Conclusion
The main objective of the study was to critically examine factors affecting effective distribution performance. One of these channel members is distributor who undertake different activities to ensure the competitiveness of the network and hence the competitiveness of the companies.
From the findings presented and the justifications presented, the researcher study makes four conclusions. First, the study concludes that in the competence and experience in the area of distribution influences performance of distribution channels that challenge the performance and successfulness of manufactured products distribution and companies can achieve higher levels of evaluation in scale of operation, specialization and skills on distribution performance by evaluating technical knowledge and competence of the channel member’s sales people and their interest in the manufacture’s products. Secondly, Financial and facility capacity has a significant
Influence on distribution performance of Unilever products, and that can improve by effectively handling property and financial affairs, increasing vulnerability to financial exploitation, facilitate the performance of warehouse, standardizing facility and warehouse distribution system, lowering cost of products to end users therefore eventually upsurge level of distribution performance of Unilever products. Third, Availability and delivery of product has an influence on the level of distribution performance and that can improve this by making goods widely available and accessible to target marketers or customers, company should have to follow seasonal variation and supply enough products to the channel members accordingly and on time
Fourth, Selling Capacity has higher influence on the level of distribution performance and that firm can improve by developing an automated forecast system that emanates through direct from the sales representatives, generate a credible sales forecast that can predict backlog, future sales event and channel members in the company should perform effectively according to the schedule and target of the company.
5.4. Recommendation of the Study
On the base of the findings/conclusion derived; the following recommendation are made by the researcher. In order to improve the distribution performance of Unilever products the following points are of importance to be considered:
- Sales managers of the company should have to closely visit and monitor official Unilever distributors, receive comments and complaints of distributors as well as from their customers and provide appropriate feedbacks and solutions in order that channel members effectively perform distribution of the products and customers should have satisfied by the distribution services.
- The company should have to design mechanism by which capacity of distributors build up by having sufficient warehouse and distribution facilities.
- The company should have to assess seasonal variation and types of products more demanded by the customers and consumers and should produce, supply enough products during the highly demanded season.
- The company should supply the products to the channel members according to the assigned target on time and as they ordered in order they satisfy their customers’ needs.
- Selection of channel members should have to be fair and reasonable and must involve other third party in the process of selection to protect unfairness or corruption.
- Company should have to give formal trainings to MDC owners about customer service, distribution management, warehouse management, and merchandising so that they can understand how they can achieve their sales target and satisfies their customers.
5.5. Suggestions for Future Research
The researcher suggests the following further research areas:
- Additional research with samples drawn from differing distribution performance environments, especially researchers that include different beverage industries, are needed.
- Furthermore it will be better if additional variables other than competence and experience financial facility capacity, availability and delivery and selling capacity; included in the model.


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Frequently Asked Questions
What are the essential factors for effective distribution?
Sufficient facilities and capable staff are essential for effective distribution of products. If a company manages for needed facilities and staff, direct channels are used, otherwise indirect channels are used. f. Company’s Past Experience: A company’s past experience can also affect channel decision.
What are the factors that affect distribution costs?
How you price your product and how your customers pay for your product has a big impact on your distribution costs. If your product is expensive to ship it will greatly affect how you deal with your distribution partners.
How to improve distribution channel efficiency?
Increasing the focus supply chain management also increases distribution channel efficiency. Implementing strategies like training programs and project plans, introducing automation, and increasing supply chain visibility are a few options.
What are the factors affecting distribution channel selection?
Factors Affecting Channels of Distribution – Factors to Consider When Choosing a Distribution Channel Some of the major factors affecting selection of channel are organization objectives, type of product, nature and extent of market, existing channel for comparable product, buying habits of consumers and channel availability.
What is essential for effective distribution of products?
Sufficient facilities and capable staff are essential for effective distribution of products. If a company manages for needed facilities and staff, direct channels are used, otherwise indirect channels are used. f.
What factors should I consider when choosing a distribution center?
Here are 10 factors to consider when choosing between one large center and several smaller centers for your distribution strategy: 1) Location, location, location: The location of your distribution center (s) needs to be considered first. Where are the majority of your customers? Or, if you’re a branch-based distributor, where are your branches?
What are the factors affecting the choice of distribution channels?
Legal Aspect: Quite obviously, permitted (legal) products can be distributed by any convenient channel of distribution. But, illegal products are distributed by direct channels for secrecy purpose. 2. Factors Related to Company: Company’s internal situations have direct impact on choice of marketing channel.
What are the key success factors of physical distribution management?
The key success factors of physical distribution management include all elements of the marketing mix: 1. Product characteristics – how do they affect delivery requirements? 2. Packaging – can the product be transported?
What are the factors affecting the distribution of a product?
i. Number of Customers – If the number of customers is large, definitely the services of the middlemen will have to be sought for. As against it, the products whose customers are less in number are distributed by the manufacturer himself.
What are the factors affecting the cost of logistics?
What are the Factors Affecting the Cost of Logistics? 1. Deregulation (Reduction in Economic Regulation) 2. Changes in Consumer Behaviour; 3. Technological Advances; 4. The Growing Power of Retailers; 5. Globalization of Trade
What factors influence logistics planning and distribution management?
Here are 6 top factors that we’ve seen influence logistics planning and distribution management: 1. Customer Perspective The ideal situation for any retailer or manufacturer is to have just enough inventory on hand to sell or to keep production lines running smoothly. These customers wish to hold as little stock as possible without running out.
What are the factors affecting the distribution network design?
Factors affecting the Distribution Network Design. Two major factors that deeply affect the distribution network design of any supply chain are –. Meeting customer’s timely needs. Costs involved in meeting the customer’s needs. Meeting the customer’s demands on time affect the revenues of the company at large, which along with
How can distribution channels be more efficient?
While managing distribution channels can be challenging, making them more efficient can lead to a boost in profits and a drop in costs. Companies can make their distribution channels more efficient by making careful choices about their channels, focusing on supply chain management, and consolidating channels.
How do I improve my distribution network?
7 steps to improve your distribution network 1) Keep track of channel dealers: 2) Inventory management and tracking: 3) Focus on local markets: 4) Focus on segmentation (example geographic): 5) Marketing expansion or Product expansion: 6) Switch channel members when needed: 7) Keep a tab on market changes:
What is a distribution channel?
A distribution channel is the means through which a company gets its products to consumers. The term is also used to describe how consumers pay the vendor for their goods and services. A distribution channel is made up of a set of independent organizations that work to make a product or service available for sale and use.
How can i Improve my Channel performance?
By tracking orders, volume and total revenue at each point, you can identify and improve underperforming partners and keep your top performers happy. 3. Communicate! Build relationships at each step of your channel.
What are the factors affecting channel selection?
Factors Affecting Channels of Distribution in Marketing Management Factors Influencing Channel Selection: Every producer, in order to pass on the product to the consumer, is required to select a channel for distribution. The selection of the suitable channel of distribution is one of the important factors of the distribution decisions.
How to select a particular channel of distribution?
A particular channel must be selected only after a careful study and consideration of all the relevant factors. 1. Market Considerations: Following are the factors related to the market which affect the selection of a particular channel of distribution:
What are the factors affecting the distribution channel of a product?
While if the buyers are widely scattered, it is very difficult for the manufacturer to establish a direct link with the consumers, hence services of wholesalers and retailers will be used. 3. Size of Business: The size of the business, financial strength of the concern determines the channel of distribution.
What is the role of product attributes in channel selection?
Product manufactured by a company itself is a governing factor of great force in the distribution channel selection. The product attributes shape the channel decision in the following manner.


