What is Distribution?

Distribution (or Place) is the fourth traditional element

of the marketing mix. Distribution is about getting the

products to the customer. distribution decisions are

those associated with channels of distribution that

serve as the means for getting the product to the target

customers. The distribution system performs

transactional, logistical, and facilitating functions. Some

examples of distribution decisions include:

 Distribution channels

 Market coverage (inclusive, selective, or exclusive

distribution)

 Specific channel members

 Inventory management

 Warehousing

 Distribution centers
  Order processing

 Transportation

Supply Chain

A supply chain is a network of retailers, distributors,

transporters, storage facilities, and suppliers that

participate in the production, delivery, and sale of a

product to the consumer. The supply chain is typically

made up of multiple companies who coordinate

activities to set themselves apart from the competition.

A supply chain strategy defines how the supply chain

should operate in order to compete in the market. The

strategy evaluates the benefits and costs relating to the

operation. While a business strategy focuses on the

overall direction a company wishes to pursue, supply

chain strategy focuses on the actual operations of the

organization and the supply chain that will be used to

meet a specific goal.

Value Delivery Network

A Value delivery network is made up of the company,

suppliers, distributors, and ultimately the customers

who partner with each other to improve the

performance of the entire system. The network of all

direct industry participants involved in the production,

marketing, delivery, installation and service of your

organization’s goods into specific demographic and

geographic markets. A value delivery network allows

many companies to create customer value that cannot

be created by use of the company's own value chain.

The Nature & Significance of marketing channels

Members of the marketing channel are specialists in

what they do and can often perform tasks better and at

lower cost than companies who do not have

distribution experience. Marketers attempting to handle

too many aspects of distribution may end up

exhausting company resources as they learn how to

distribute. Not only are channel members able to

reduce distribution costs by being experienced at what

they do, they often perform their job more rapidly

resulting in faster product delivery.

Marketers have to understand what customers want in

their shopping experience .Resellers within the channel

of distribution serve two very important needs: they

give customers the products they want by purchasing

from many suppliers and they make it convenient to

purchase by making products available in single

location. Intermediaries, however, provide several

benefits to both manufacturers and consumers:

improved efficiency, a better assortment of products

and easier searching for goods as well as customers.

Types of distribution intermediary

There is a variety of intermediaries that may get

involved before a product gets from the original

producer to the final user. These are described briefly

below:
Retailers: Retailers operate outlets that trade directly

with household customers. Retailers can be classified in

several ways:

Wholesalers: Wholesalers stock a range of products

from several producers. The role of the wholesaler is to

sell onto retailers. Wholesalers usually specialize in

particular products.

Distributors and dealers: Distributors or dealers have a

similar role to wholesalers – that of taking products

from producers and selling them on. However, they

often sell onto the end customer rather than a retailer.

They also usually have a much narrower product

range. Distributors and dealers are often involved in

providing after-sales service.

Franchises: Franchises are independent businesses that

operate a branded product (usually a service) in

exchange for a license fee and a share of sales.

Agents: Agents sell the products and services of

producers in return for a commission (a percentage of

the sales revenues)

Number of channel levels

Distribution channels move products and services from

businesses to consumers and to other businesses. Also

known as marketing channels, channels of distribution

consist of a set of interdependent organizations such as

wholesalers, retailers, and sales agents involved in

making a product or service available for use or

consumption. In the figure below, Channel 1 is called a

direct-marketing channel, since it has no intermediary

levels. Channel 2 contains one intermediary. In

consumer markets, this is typically a retailer. Channel 3

contains two intermediary levels - a wholesaler and a

retailer.
Marketing Logistics

Marketing logistics is the set of activities concerned

with efficient movement of finished goods from the end

of the production operation to the consumer. Marketing

logistics takes place within numerous wholesaling and

retailing distribution channels, and includes such

important decision areas as customer service, inventory

control, materials handling, protective packaging, order

procession, transportation, warehouse site selection,

and warehousing. Physical distribution is part of a

larger process called distribution which includes

wholesale and retail marketing, as well the physical

movement of products.

Major Logistics Functions

Warehousing

Storage warehouses are basically commercial buildings

used in storing goods or merchandise owned by

different companies. It helps lessen the expense of

companies in having to transport all the goods to

different places. Storage warehouses serve as depots for

merchandise or other parts for manufacturing

companies.

Inventory Control

Inventory control can be a major component of a small

business physical distribution system. Inventory

management also effects customer satisfaction.

Inventory management is primarily about specifying

the size and placement of stocked goods. Inventory

management is required at different locations within a

facility or within multiple locations of a supply

network to protect the regular and planned course of

production against the random disturbance of running

out of materials or goods.

Transportation

The choice of transportation carriers affects the pricing

of products, delivery performance and condition of the

goods when they arrive. In shipping goods to its

warehouses, dealers and customers the company can

choose among five main transportation modes: truck,

rail, water, pipeline and air along with the internet.

Third Party Logistics

Anyone can store inventory and send it out on a truck.

When looking to outsource all or part of a company’s

logistics function it is important to look for a third

party logistics provider with proven expertise. To put it

simply, third party logistics or "3PL" is the integration

of a company’s warehousing, transportation, and

related logistics services through an outsourced or

"third party" partnership.

Distribution Strategies

For product-focused companies, establishing the most

appropriate distribution strategies is a major key to

success, defined as maximizing sales and profits.

Depending on the type of product being distributed

there are three common distribution strategies

available:

Intensive distribution

It is a distribution strategy based on making the

product available to consumers at every possible

location so that consumers can buy with a minimum of

effort. Used commonly to distribute low priced or

impulse purchase products e.g. chocolates, soft drinks. 

Exclusive distribution

IT involves limiting distribution to a single outlet. The

product is usually highly priced, and requires the

intermediary to place much detail in its sell. An

example of would be the sale of vehicles through

exclusive dealers.

Selective Distribution:

A small number of retail outlets are chosen to distribute

the product. Selective distribution is common with

products such as computers, televisions household

appliances, where consumers are willing to shop

around and where manufacturers want a large

geographical spread.
Developing and implementing distribution strategies

While some businesses can handle all factors and

aspects of its own distribution, others require some

level of distribution partnership. Choosing the right

distribution channel to move products or services to the

end user is a long-term strategic decision and varies

according to the product, service and market. When

choosing a distribution strategy, a marketer must

determine what value a channel member adds to the

firm’s products and/or service. A well-chosen channel

is necessary because it constitutes a significant

competitive advantage and is designed to save on cost,

improve and increase efficiency, provide routinization

of transactions, provide a larger customer base, and

allows businesses to focus on other aspects of the

organization. It is important that the channel also

provide businesses with strategic promotion, brand

strategy, and provide convenience for customers while

bridging the gap between the assortment of goods and

services generated by producers and those in demand

from consumers. Poorly chosen channels can have

long-term consequences and can ultimately lead to a

superior product or services failure in the market.

Having access to good distribution is fundamental to

good marketing. Within the distribution channel is the

ability to use intermediaries to strategically market a

product or service.

ABOUT THE COMPNY

Orient appeared on the horizons of trading business of

Pakistan in 1957. The GROUP started with the

establishment of ORIENT COLOR LABS, a humble

business in photo optics and photo finishing and in just

40 years of operations it has developed into one of the

largest trading company in Pakistan dealing in popular

brand names in consumers' electronics, audio and

video goods, photographic equipment, cell phones and

lighting products. The Group imports all renowned

brands from America, Japan, Europe, Germany and

Italy and has business deals with such international

names in the consumer products' market as Mitsubishi,

Yashica, Osram, Sanyo and a number of Italian and

German companies. Today the business concerns of OG

(Orient Group) encompass three major industries:

 Photographic Industry

 Electronics and Home Appliance Industry

 Lighting Industry

Distribution Intermediaries

Distribution intermediaries are helping the company to

promote, sell, and make-available a good or service

through contractual arrangements or purchase and

resale of the item. Orient is using direct marketing

channel as well as indirect marketing channels like

wholesalers and retailers who in turn sell the product

to customers.

Marketing Logistics

Warehousing

Storage warehousing is of great importance to the fast

developing businesses of today. Orient is having three

types of warehouses: raw material stores, finished

goods warehouses and after sale service warehouse.

Raw material stores

It can take a wide variety of component parts to

successfully manufacture the final product, which is

why accurate labeling, weighing and management of

raw materials are so vital to the processing operation.

Orient is managing all this through raw material stores.

Finished goods warehouses

 Completely manufactured products ready for sale and

delivery to the marketplace are kept in finished goods

warehouse. There are total five warehouses of Orient

 Refrigerator

 Air Conditioners

 Lighting

 Microwave ovens

 Washing machines

After Sale Service Warehouse

Orient supports clients and customers throughout

Pakistan with reliable after sales services provided by a

warehouse, logistics and repair network. If a customer

has any complaint regarding any appliance of Orient,

the damaged part is repaired or replaced immediately.

Transportation
As transportation affects the delivery performance so it

is of great importance in marketing logistics. Orient has

its own fleet of 20 vehicles. It also uses vehicles of

contractors. Stock is delivered to different branches

through trucks all over Pakistan.

Logistics Information Management

Company is managing its logistics through SAP

(System Application Product). It is software which

delivers products and services that help accelerate

business innovation for our customers. We believe that

doing so will unleash growth and create significant

new value for our customers, SAP, and ultimately,

entire industries and the economy at large. Through

SAP, the company stays connected with its 14 branches

all over Pakistan. When stock is required by any

branch, a stock transfer request is passed to finished

goods warehouse manager. General Manager of sales &

distribution approves it. Then MD authorizes it. Then

outward gate pass is formed and stock is delivered to

the destination.

The services within this column relate to the ultimate

delivery of the goods to the customer. Besides physical

distribution including store distribution Orient also

offers customer service activities. On behalf of the

customer it is possible to outsource all customer service

activities like handling of complaints and return goods

to Orient.
 DATA ANAYLYSIS

Most of the information is collected from secondary

sources. Information required in writing this report is

already available on internet and I have extracted it from

different websites. I have extracted information about

Chinese economy from different reports. I have also

collected data from sources such as articles, journals,

magazines, books and periodicals to obtain historical and

other types of information. Some information is also

collected from the primary source. I have taken lot of

information about the company from its website and one

of its employees.

CONCLUSION

A marketing channel is critical to large and small

businesses because they use these distribution channels

to meet their marketing and business objectives by

providing and delivering products and/or services that

generate profit and increase their customer base. Well

networked and properly knitted distribution channel

plays an important role in enhancement of sales

growth. It is the key for resellers to get the real picture

and review of the product. Besides, giving them the

first step aid in understanding product and answering

their queries, the distribution partners bridge the gap

between vendors and resellers. They facilitate them

with the ability to roll back to the vendors to rectify any

problem and also to concentrate on the market with

right policies in place. In the end, from my point of

reasoning, I would like to say that Orient is developing

and managing distribution strategies in a very

professional manner.

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RECOMENDATION
Company should try to keep optimum level of raw

material to avoid breakdowns in production function.

Company should emphasize to develop channel

management strategies that are more competitive and

cost effective. It should design a distribution strategy to

fit current and future competitive market scenarios.

Company should treat resellers and third party

distributions channels just as if they were its own

employees. Understand how to motivate them, how to

get to know them, create relationships with them,

spend time with them in the field, make sure that they

have the resources and support in order to be effective

at their job and Orient can win the distribution channel

and get them selling for the company.

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 REFERENCES

1) http://www.learnmarketing.net/place.html

2) http://www.consumerpsychologist.com/distribution.

html

3) http://www.business.com/directory/transportation_a

nd_logistics/logistics

/warehousing_and_distribution/

4) http://en.wikipedia.org/wiki/Logistics

5) http://www.rozee.pk/company-details.php?

compid=4507

6) http://www.oppapers.com/essays/Value-Delivery-

Network/59040

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