PHYSICAL

DISTRIBUTION

DONE BY:
S.KIRUBASHINI
TTGI193003
BBA
 DEFINITION
• According to Philip Kotler, physical
distribution “involves planning, implementing
and controlling the physical flows of materials
and final goods from place of production to
the place of end use to satisfy buyers’
needs.”
 RELATION WITH MARKETING MIX

PRODUCT – FMCG (MASS DISTRIBUTION)

PERISHABLE PRODUCTS (SHORT DISTANCE)

PRICE – RECIPROCAL RELATIONSHIP

PROMOTION – GRABS THE MARKET POTENTIAL

 IMPORTANCE OF PHYSICAL DISTRIBUTION

1. Creating Time and Place Utility:

 Physical distribution activities help in creating time and place utility. This is
done through transportation and warehousing. Transportation system creates
place utility and Warehousing creates time utility.

2. Helps in Reducing Distribution Cost:

 Proper and systematic planning of transportation schedules and routes,

warehousing location and operation, material handling, order processing, etc.
can easily bring in cost economies.
3. Helps in Stabilization of Price:

 Physical distribution can contribute considerably to the attainment of

the situation of price stabilization. Physical distribution components
are capable of bringing about much desired price stabilization.

4. Improved Consumer Services:

 Consumer service in physical distribution means making products in

right quantity available at right time and right place i.e. place where
customer needs.
COMPONENTS OF PHYSICAL DISTRIBUTION
1. ORDER PROCESSING

2. TRANSPOTATION

3. STORAGE AND WAREHOUSING

4. MATERIAL HANDLING

5. INVENTORY MANAGEMENT AND CONTROL

6. PACKAGING
 ORDER PROCESSING

1. VERIFYING CUSTOMER’S CREDIBILITY

2. CHECKING FOR ANY OUTSTANDING PAYMENT

3. MONITORING STOCK LEVEL

4. PREPARING INVOICE

5. ARRANGING TRANSPORTER

6. SENDING THE CONSIGNMENT AND INFORMATION

 Selection of the transportation mode
1. Suitability or nature of product
2. Affordability
3. Availability
4. Customers’ specifications
5. Competitor’s transportation mode

TYPES OF TRANSPORTATION
1. Road transportation
2. Air transportation
3. Railways
4. Water transportation
5. Pipelines
 Warehousing

• Type of warehouse

1. Private warehouse

2. Public warehouse

3. Distribution warehouse

4. Bonded warehouse

5. Depot

– Number and Size of Warehouses

 Warehousing
1) Location
i. Availability of basic facilities such as electricity, water, labor, transport etc.
ii. Space
iii. Roads
iv. Government rules and regulations

2) Layout
i. Proper lighting, ventilation, and fire precaution
ii. Protection from temperature, moisture, etc.
iii. Security arrangement
iv. Space arrangement
 Warehousing
3) Storage Methods

i. Optimum use of space

ii. Ease in storing and picking

iii. Accurate identification of material

iv. Possible to follow FIFO

v. Provision for fast moving items

 Material Handling

 Involves placing and positioning of material

to facilitate movement and storage

 Common equipments are conveyors, bucket

Elevators, hoists, lifts, cranes, forklifts,
trolleys, dumpers, trailors, trucks
 Inventory Management & Control

 Major tool to cost reduction objective

 Just –in –time

– Reliability of suppliers
– Close communication between suppliers and customers
– Attention to quality
– Adequate storage facilities and transportation options
 Packaging

• The basic role of packaging in any industry is to carry the goods safely through a
distribution system to the customer.

The Package must do following:

1. Identify the Product
2. Contain & Protect the product
3. Contribute to physical distribution efficiency

• Thus these steps will protect the product against shock, compression, vibration,
moisture, heat, solar radiation, oxidation, animals, bacteria etc.
 Channels of Distribution

 A Channel Distribution is one or more companies or

individuals who participate in the flow of goods or services
from the producer to final customer

Examples:
1. Company may deliver directly to customers
2. Use other companies or individuals to deliver goods
3. Intermediaries
- wholesalers – agents
- transportation companies – warehouses
METHOD OF PHYSICAL DISTRIBUTION