A study on Logistics Management
The length and number of channel members varies from product to product, situation to situation and organization to organization. The classification of the channel of distribution can be done based on the length or the number of middleman involved in moving the products from manufacturer to buyers. Channel design should begin with the final buyer and work backward to the manufacturer and the finally selected channel must be totally appropriate to the basic objectives of the organizations’ marketing programme. The channel structure must be flexible enough so that the use of one channel design doesn't result in closure of doors for other designs.
Marketing channels can be viewed as sets of interdependent organizations involved in the process of making a product or service available for use. Marketing channels not only satisfy demand by supplying goods and services at the right place, right quantity, right quality for right price but they also stimulate demand through promotional aspects.
Distributing Buyer products begins with the manufacturer and ends with the ultimate Buyer. Between the two there is usually at least one middleman - a retailer. In the distribution channel the last middleman is a retailer. He is also the last link between the producer and the Buyer. The retailer is directly in contact with the ultimate buyer. It is believed that the retailer may generally
influence Buyer brand choice by exaggerating the band/product attributes of a specific brand, specifically in case of not
so popular brands. In other words, the retailer may support some brand or disfavour some depending upon his own relationship with the brand market, or the margin available from the specific brand concerned. When the retailer supports a brand the possibility of success of that brand is high, unless the brand itself is of inferior quality.
In today's economy most manufacturers sell their products through a host of marketing intermediaries performing a variety of functions and bearing a variety of names. The various agencies involved in performing these functions are called channel members.
Marketing channels reduce the Buyer's search, waiting time, storage and other costs by lessening their involvement. Marketing channels are used where the products are frequently purchased in small quantities and the Buyers are very scattered over very large area. Channel design is also affected by the characteristics of middleman who are available on the channel line. A creative and well-executed marketing channel provides some of the more potent means by which manufacturers enhance their ability to compete domestically and internationally. In the business world, Buyers themselves discover many influences and problems encountered by Buyers through the spontaneous suggestions.
The Buyer can obtain information from any of several sources. These include: 1. Personal sources Family, friends,
neighbors. 2. Commercial sources Advertising, Sales
people, Packaging. 3. Public sources Mass Media, Buyer
rating organizations. 4. Experiential sources Handling, examining
using the product. The relationship between the Buyer's expectations and the products perceived performance depends on whether the product meets expectations there by satisfying the Buyers or falls short of expectations and making the Buyer dissatisfied.
Understanding the Buyers’ needs, wants and buying behaviour is at the heart of delivering successful products to the market place.
In a vast country like India characterized by marked inter-regional differences in physical, climatic, socio-economic and cultural features which may, in no small measure, lead to perceptible region-to-region variations in the Buyer behaviour, the inter-regional homogeneity assumption may not be realistic.
Buyer behaviour concentrates on understanding the attitudes, attributes, beliefs, values, norms of the Buyers and it analyses the way the Buyer consciously or unconsciously follows any of these. Buyers do not make decisions in vacuum. Their purchases are strongly influenced by cultural, social, personal and psychological factors.
One of the key elements of channel design is figuring out how many sales outlets should be established in a given geographic area and what kind of participation in the marketing flows is required from each of the outlets so that needs of the existing, potential and past Buyers may be adequately served.
Good human resources practice can also motivate organizational members to do outstanding work. It is basically a method of developing potentialities of employees so that they get maximum satisfaction of their work and give their best efforts to the organization.
The need for independent distributors is growing through out the world because of increased cost of sales, large Buyer base, large quantity production of stackable items, sales in small quantities and need for rapid and timely delivery of products. New marketing opportunities are emerging in Indian market involving wider use of distribution network for handling different range of products. The budgets and liberalization in the recent years have significantly boosted the distributors' income.
The Buyer market is fast increasing which requires a large network of channel distribution. The social changes such as small families, late marriages are some of other factors that are necessitating more middleman. The need for supplying products as nearer to the Buyer as possible is assuming greater significance because of increased number of working women and more urbanization.
Economic development, which is the focus of many developing countries, is also causing increase in the business.
Added to the above economics oriented explanations for the growth of existence of channel structure factors like technological, cultural, geographical, social and political also have influence on the marketing channel length and structure. Improved technology in information and communication is also resulting in the increase in the channels of distribution. Latest improvements in communication technology are facilitating electronic data storing and exchange among the channel members. New methods of transport, freight handling and coordinated methods of transporting have produced a number of new model combinations including containers on ships, which did not exist earlier. The computer revolution has made possible new managerial models vital to the successful management of logistics and other marketing activities.
The starting point of good distribution system is to study what the Buyer wants and what the competitors are offering. The competitor's characteristics also influence the channel strategy. A product may be the best in the world but it will be of little use unless it reaches the Buyer where he wants and when he wants. In all cases where Buyers are involved the middleman are necessary
"Distribution Channels in Buyer Durables " by Agarwal J.K. - Lok Udyog - Jan - Feb 1979. "Marketing Management " by Philip Kotler Millenium Edition Loudon, D.L. and A.J. Della Bitta, "Buyer Behaviour Concepts and Applications", Mc Graw - Hill book Co., New York; Second Edition, pp. 380-430. Sternthal B. and Craig, C. S. " Buyer Behaviour - An information perspective", Prentice Hall of India, Fourth Edition. John, A Howard and Sheth, N. Jagadish "The theory of Buyer behaviour", John Willey and Sons, Incl., New York; Fifth Edition, pp. 193215.