Fundamentals of Business

Distributing the product

Distributing the product determining how product products should move through s wholesale and retail organizations is a crucial marke marketing decision ting decision.

Some products are marketed most effectively by direct sale from manufacturer to consumer. Among these are durable equipment for example, computers, office equipment, and industrial machinery and supplies. However, many consumer goods are also sold directly to the public as well, through advertisements, direct mail, and "house parties".

. Direct marketing by mail has been expanded to virtually all types of products and services. Working people find it easy to shop in their leisure hours by catalogue, and comparison shopping is made easier because catalogues generally contain extensive product information. For retailers, the use of catalogues makes it possible to do business considerably beyond their usual trading area and with a minimum of overheads. Also important are credit cards, which have made it relatively easy to purchase by mail or telephone even such high priced items as appliances, electronic equipment, and cameras.

. Television is a potent tool in direct marketing because it allows people to see the demonstration of products in use. Direct sale of all kinds of goods to the public via home shopping facilities broadcasting on cable television channels or interactive networks is gaining in popularity. Increasing use is also being made of telephone marketing, or telemarketing, a technique used in selling to businesses as well as to consumers, and in marketing over the Internet. Most consumer products, however, move from the manufacturer through agents to wholesalers and then to retailers, before ultimately reaching the consumer.

. Wholesalers distribute goods in large quantities, usually to retailers, for resale. Some retail businesses have grown so large, however, that they have found it more profitable to bypass the wholesaler and deal directly with the manufacturers or their agents. Wholesalers first responded to this trend by adapting their operations so that they moved faster and called for a lower margin of profit. Small retailers fought back through cooperative wholesaling, the voluntary banding together of independent retailers to market a product. The result has been a trend towards a much closer, interlocking relationship between wholesaler and independent retailer.

. Retailing has undergone even more change. Intensive pre selling by manufacturers and the development of minimum service operations for example, self service in department stores have drastically changed the retailer’s way of doing business. Supermarkets and discount stores have become commonplace not only for groceries but for products as diversified as medicines and gardening equipment.

More recently, warehouse retailing has become a major means of retailing higher priced consumer goods such as furniture, appliances, and electronic equipment. The emphasis is on generating shop traffic, speeding up the transaction, and rapidly expanding the sales volume. Chain stores groups of shops owned by the same firm and cooperative groups have also proliferated. Special types of retailing, for example, vending machines and convenience stores, have also developed to satisfy consumers needs more easily and cheaply.
Transporting and warehousing merchandise are also technically within the purview of marketing. Products are often moved several times as they go from producer to consumer. Products are carried by rail, lorry, ship, airplane, and pipeline. Efficient traffic management determines the best method and timetable of shipment for any particular product.