Chapter 2.
DISTRIBUTION
MANAGEMENT FUNCTION
2.1. The
Notion of Distribution Channels
Ø Organization
Though The Channel defines the distribution channels as a line crossed by flows
of goods from producers to intermediaries and finally to the wearer.
Ø According to
the American Marketing Association defines distribution channels as a structure
that is the organization within the company and outside the company, consisting
of agents, dealers, wholesalers and retailers, through which a commodity, the
products or services marketed.
Ø From the
above definition of the second dapat disimpulkan that is an intermediary
distribution channels to move products or services from producers to consumers.
2.1.1. A Variety of Distribution Channels according to
(Swastha and Irawan, 1997, p. 295-297)
1. Manufacturer – Consumer
This form of distribution channels is the most short
and simple because without the use of intermediaries. Manufacturers can sell
goods that it generates through the mail or directly go to home consumers (from
House to house). Therefore this channel is called a direct distribution
channel.
2. Manufacturer – Retailer – Consumer
Manufacturers only serve a large number of sales to
wholesalers only, not to sell to retailers. Purchases by retailers served by
wholesalers, and purchases by consumers served retailers only.
3. Manufacturer – Wholesalers – Retailer – Consumer
Distribution channels is widely used by manufacturers,
and is named after the traditional distribution channels. Here, the
manufacturer only serve a large number of sales to wholesalers only, not to
sell to retailers. Purchases by retailers, wholesalers and catered for purchase
by consumers served retailers only.
4. Manufacturer – Retailer – Consumer – Agent
Here, the manufacturer selects agent as penyalurnya.
He runs a large trade activities in the distribution channels. The sales target
is mainly addressed to the major retailers.
5. Manufacturer – Agent – Wholesalers – Retailer –
Consumer
In the distribution channels, manufacturers often use
agents as intermediaries to channel goods to wholesalers who then sell it to
small shops. The agent is visible in the distribution channel is primarily
sales agents. (Swastha and Irawan, 1997, p. 295-297)
2.1.2. Some alternative types of channels that can be
used based on the type of product and market segments
1)
consumer
goods distribution channels
Sales of consumer goods intended for the consumer
market, where it is generally sold through intermediaries. This is intended to
reduce the cost of achieving a broad market spread that cannot be achieved by
one manufacturer. In supplying consumer goods there are five types of channels
that can be used.
2) industrial goods distribution channels
Due to the characteristics of the different industrial
consumer goods, then the distribution channels, he also is somewhat different.
Industrial goods distribution channels also have the possibility/equal
opportunity for any manufacturer to use Office/branch sales.
3) distribution channel services
The concept of distribution channels are also not
limited to tangible goods distribution channels only. Manufacturer services
also face a similar problem: how their results can be obtained up to the
consumer.
2.1.3. The Notion of Distribution Management
Ø Distribution
management is developing a strategy that is aligned with the vision and mission
of the company, based on the relevant decisions to move the goods physically or
non physical in order to achieve the objectives of the company and are in
certain environmental conditions (Walters, 1977).
Ø Other
notions about the distribution management is an approach that is oriented on
the decision (decision oriented approach) which means that attention is
directed to the development of effective policies ranging from planning,
mengornagisasikan, operte and control.
2.2. the
IMPORTANCE of DISTRIBUTION CHANNELS in ORDER to CREATE VALUE
Function of the distribution channels is activities
conducted members of the distribution channel for transferring goods from
producers to consumers on its implementation it may cause difference (gap) the
flow of goods from the principal to the consumer.
2.2.1. A variety of differences in distribution
channels
A. Geographical
gap
Is the difference in geographical
distance caused by the difference in the production center
B. Time gap
Is the distance of time differences
caused by the gap that occurs between the time the production with consumption
of products produced in a big way.
C. a Quntity of
gap
Due to the production is done in a
large scale to obtain lower cost perunit whilst consumption occurs in smaller
amounts.
D. Variety of
gap
Happens because most manufacturers
produce variations of certain products which at that time was not the same as
what is needed by the consumer.
Quantity gap and this gap raises a
variety of form utility.
E. Communication
& information gap
Happen because consumers often don't know the sources
of production of the product is needed while manufacturers don't know who
potential consumers, where it is located.
2.2.2. A variety of Value To the product
1.
the Values to the form
The benefits created by the existence of changes in an
attempt to fix an item.
2.
Value for time
It means the product is available at any time when
needed.
3.
the value in order to place
Does that mean the product will have a higher value in
different places.
4.
Value to property
Shows the activities that change the ownership of an
item.
