Consumer Choices in Product Distribution Strategies
A large percentage of companies in any industry experience some kind of product distribution strategies and/or problems, usually related to the supply chain or inventory bottlenecks. The common denominator for most businesses looking to improve their customer satisfaction and/or profitability is improving product distribution strategies. There are four elements of effective product distribution strategies, namely, planning, implementation, monitoring, and adjustments. In short, they all lacked clear product distribution strategies.
In this part we look at the last component of the fourPs. The learning activities for this part include:
- Planning: Product Distribution Strategies.
- Quality Assurance: Product Distribution Strategies and their Effect on Quality Assurance.
- Business Development: How to Make Good Sales Teams.
- Testing & Adjustments: How to Measure Product Distribution Strategies Success.
Planning is perhaps the most important part of any successful product distribution strategies. For example, when marketing a business, the marketer may choose to buy TikTok views ahead of their campaign to ensure that they reach a wider audience.
Planning involves a detailed analysis of goods available for sale, their physical and technical characteristics, and the marketing mix of these goods. Once all of this information is ready, then good sales teams can be developed and good plans can be implemented. Good product distribution strategies, therefore, should take into account physical and technical aspects as well as market mix.
Implementing strategies, however, is only half the story. The other half–the monitoring and adjustment processes–must also be effective if consumers are to get what they pay for and remain satisfied. For this reason, many product distribution strategies manufacturers devote considerable resources to ensuring their processes are efficient and economical. The U.S. Bureau of Labor Statistics estimates that approximately $1.5 billion is lost by companies in the United States each year due to poor quality, defective products, and customer dissatisfaction. Poor quality consumer goods and services, in particular, cost consumers millions of dollars.
Companies that offer quality consumer products and services face a myriad of competitive pressures. They must respond quickly and effectively to changing consumer preferences, rapidly rising demand, and extended time frames. To avoid being squeezed out of the market by increasingly competitive rivals, many companies employ extensive warehousing and distribution systems. In order to maximize profits, companies have resorted to several innovative and complicated distribution processes, including advanced packing and labeling methods, selective distribution, and extensive shipping. These distribution processes require advanced skill, knowledge, and technology. But all these efforts can go to waste if inadequate resources are devoted to their execution.
Companies that are serious about providing consumers with excellent products at affordable prices need to exert extra effort in finding distribution partners that can meet their demands. In addition to selecting efficient partners, these companies must also monitor and adjust their operations regularly to maintain excellent levels of productivity. One important measure of a company’s success in turning out quality goods is how its outlets fare in terms of customer satisfaction. A successful distribution system should be able to maintain high levels of satisfaction even during times of economic instability or change in consumer sentiment. For this reason, companies that want to achieve the goal of satisfying the customers they cater to should implement intensive research into how their outlets perform when faced with various financial risks.
The success of any product distribution strategies depends highly on how well a business compensates for various factors that affect costs and profitability. One such factor that directly influences distribution costs is the distance of an outlet from its main retail facility. An outlet located near the main facility of a company makes it easier for the retailer to obtain supplies at lower price. Cross docking, where products are stocked in multiple locations, often results in lower unit costs. But cross docking requires substantial additional resources from retailers, such as money and time for setting up and supervising the system, personnel to manage the dock, and employees to stock the products.
Good sales management and good distribution management go hand in hand. Both are intimately connected and cannot be successfully implemented if one is not correctly coupled with the other. Effective sales management and distribution management involve a coordinated effort among all the functions of the business, including planning, investing, staffing, and financing.