Introduction to

Distribution
Management
After the completion of the unit, stud ents w ill be able to:

1. define and d etermine how distribution helps in business op eration .

2. analyz e the usefulness of wh olesaling and retailing in the d istributio n process
3. conduct research in d eterminin g its structures and function s in the actual w orkplace
4. design a framework for the stru ctu res in the implementation of th e marketing chan nels
 PLACE DISTRIBUTION
A vital aspect of marketing

Ensuring the product's availability in the right

quantity, at the right time, and place.
DISTRIBUTION
MANAGEMENT
● It is the management of all activities, movement, and
coordination of supply and demand in the creation of
time and place utility in goods.

● It is the art and science of determining requirements in

acquiring, distributing, and finally maintaining them in
an operationally ready condition for their entire lives.
 DISTRIBUTION
PLANNING
A systematic decision-making that includes the
physical transfer of goods and services from the
manufacturer to the final user.
• Transportation. It is the way to
transfer the finished goods from the
producer/manufacturer to the ultimate
buyer/consumer.

• Inventory Management. It is the

process of keeping the product safe
and maintaining its stocks to avoid a
shortage of supply.

• Customer Transactions. It describes

follow-ups on customers, including
feedback and satisfaction level after
buying the product.
 Marketing Distribution
Channel
The network of businesses and people that
move a product from the manufacturer to the
consumer. It's also known as a distribution chain
or marketing channel.
Distribution Channel

A system or path through which

goods and services move from the
producer to the final consumer. It
includes intermediaries such as
wholesalers, retailers, and agents that
facilitate the flow of products.

Channel of Distribution

Another term for a distribution

channel, referring to the network
used by businesses to deliver
products or services to consumers
efficiently.
• Channel Members – Individuals or businesses
involved in the distribution process, such as
manufacturers, wholesalers, retailers, and
agents, who contribute to moving products
from production to consumption.

• Middlemen – Intermediaries in the

distribution channel who help facilitate the
movement of goods by buying, selling, or
distributing products.
• Middlemen act as a go-between the producer and the
consumer. It refers to the following: wholesalers,
retailers, and marketing specialists
Channel members
01. Manufacturers
They create products that are later
distributed through various channels
to reach consumers.

02. Service Providers

Companies or individuals that offer
services instead of tangible goods.

03. Wholesalers
Buy goods in bulk from the
manufacturers and sell
Channel members
04. Retailers
Businesses or individuals that sell
goods or services directly to the final
consumers

05. Marketing Specialist

A professional who develops and
implements marketing strategies to
promote

06. Consumers
They are the final users in the
distribution process.
BASIC TYPES OF
DISTRIBUTION CHANNEL
Direct Channel Distribution
A method where the manufacturer or service provider
sells products directly to consumers without
intermediaries. This can occur through company-owned
stores, online platforms, or direct sales representatives.

Indirect Channel of Distribution

A method that involves intermediaries such as
wholesalers, retailers, or agents to deliver products from
manufacturers to consumers.
 INTENSITY OF
CHANNEL COVERAGE
Exclusive Distribution
Selective Distribution
Intensive Distribution
Dual Channels of Distribution
Exclusive Distribution
A strategy where a manufacturer grants a
single distributor or retailer the sole right to
sell a product in a specific geographic area.

This is common for luxury goods, high-end

electronics, and designer brands (e.g., Rolex
watches, Ferrari cars).
Selective Distribution
A middle-ground approach where a
manufacturer limits the number of retailers
that can sell its products.

This helps maintain brand image while

ensuring accessibility. Common for
premium brands like Apple, Nike, and Sony.
Intensive Distribution
A strategy where a manufacturer places its
products in as many outlets as possible to
maximize sales.

This is common for everyday consumer

goods like snacks, soft drinks, and
household items (e.g., Coca-Cola, Colgate,
and Lay’s).
Dual Channels of
Distribution
A strategy where a manufacturer uses multiple
distribution channels simultaneously to reach
different customer segments.

For example, a company may sell products through

its website (direct) while also distributing through
retail stores (indirect). Brands like Adidas and
Samsung use this approach.
 Physical Distribution
Physical distribution refers to a broad range of activities
focused on the efficient movement of goods from the
production line to consumers

It may also include transporting raw materials from

suppliers to manufacturers. The goal is to ensure timely
delivery, proper storage, and optimal product conditions
while complying with legal requirements.
Key Components of Physical Distribution:
01. Customer Service
Ensuring customer satisfaction by
delivering products on time and in
the expected condition.

02. Shipping
The process of transporting goods,
often over long distances, to reach
retailers or consumers.

03. Warehousing
Storing raw materials, semi-finished
goods, or final products in facilities
before distribution.
Key Components of Physical Distribution:
04. Inventory Control
Managing stock levels to ensure the
right quantity, quality, and timely
availability of materials.

05. Packaging
Preparing products for sale by focusing on
presentation, durability, and appeal (e.g.,
size, color, shape, and weight).

06. Receiving & Materials Handling

Properly managing raw materials and finished goods
to facilitate efficient production and distribution.
 TRANSPORTATION
The process of moving goods and services from one
place to another.

It's a key part of supply chain management, affecting

how well products reach consumers.
Five basic transportation forms:
Railroads
Best for transporting heavy and bulky
goods over long distances. These
products are usually low in value but
require efficient, large-scale movement,
such as coal, minerals, and agricultural
products.
Five basic transportation forms:
Motor Carriers (Trucks & Buses)
Ideal for short-distance or local
transportation. They are flexible and can
deliver goods quickly, often used for
perishable or time-sensitive items.

Trucks are commonly used for retail

deliveries and food distribution.
Five basic transportation forms:
Waterways (Ships & Barges)
Used for transporting large,
heavy, and low-value items like
raw materials, grains, and
petroleum.

Water transport is cost-effective

but slower, making it suitable for
intercontinental trade.
Five basic transportation forms:
Pipelines
Designed for continuous transport of
liquids, gases, and semi-liquids, such as
oil, natural gas, and chemicals. Pipelines
ensure safety and efficiency while
reducing transportation costs for these
materials.

Malampaya is benefiting the country in countless ways,

including reducing oil imports, ensuring a more stable
supply of cleaner energy from an indigenous resource and
meeting up to 20% of the country's energy requirements.
Five basic transportation forms:
Airways (Air Transport)
The fastest but most expensive mode, suitable for urgent, perishable, or high-value
goods like medical supplies, electronics, and luxury items. Airlines cater to premium
shipments that require minimal delays.
three major kinds of service companies
Government Parcel Post
This service is provided by national or
local postal authorities to ensure safe
and secure delivery of documents and
packages.

It helps prevent loss, theft, or delays

by offering tracking and security
measures.
three major kinds of service companies
Containerization
A modern method of transporting goods where
cargo is placed in large, durable containers that
can be easily transferred between different
transportation modes (trucks, trains, ships, and
planes).
three major kinds of service companies
Freight Forwarding
A logistics service where specialized firms
consolidate shipments from different
businesses (especially small shipments under
500 lbs.) and arrange for delivery.

Freight forwarders handle documentation,

customs clearance, and coordination between
various carriers
Categories of Transportation Firms
01. Common Carriers 03. Exempt Carriers
Open to transporting goods for any Free from economic regulations,
customer, cannot refuse shipments mainly transport agricultural and
unless rules are violated. specialty products.

02. Contract Carriers 04. PRIVATE Carriers

– Serve specific shippers based on Businesses using their own transport
agreements, with flexible routes, for their goods, following safety
schedules, and rates. regulations.
 INVENTORY MANAGEMENT
Inventory Management is the process of tracking,
controlling, and optimizing a company's stock of goods,
raw materials, and finished products.

It ensures that the right quantity of items is available at

the right time while minimizing costs and avoiding
stockouts or overstocking.
Common Inventory Management Techniques:
Just-in-Time (JIT)
First-In, First-Out (FIFO)
Last-In, First-Out (LIFO)
ABC Analysis
Two Concepts in Inventory Management
Just-in-Time (JIT) / Quick Response (QR) Inventory System
Minimize inventory holding by ordering raw materials and semi-processed goods only
when needed.

Benefits:
Reduces storage costs and waste
Enhances supplier-buyer relationships
Improves production efficiency and responsiveness
Two Concepts in Inventory Management
Electronic Data Interchange (EDI)
Digitally connects manufacturers, suppliers, and wholesalers to track inventory and
optimize stock levels.

Benefits:
Reduces inventory carrying costs
Prevents overstocking and markdowns
Speeds up the flow of goods and information
 WAREHOUSING
It involves the physical facilities used primarily for
the storage of goods and maintenance of supply for
efficient delivery held in anticipation of sales and
transfers within a distribution channel in the
organization.
TYPES OF WAREHOUSING
01. Private Warehouses 03. BONDED Warehouses
Owned and operated by companies Store imported or taxable goods,
to store and distribute their own which can only be released after the
products, giving them full control required taxes are paid.
over operations.

02. PUBLIC Warehouses 04. FIELD Warehouses

Offer storage and distribution Used as collateral for loans from
services to businesses or individuals banks or financial institutions,
for a rental fee, available on a daily, ensuring stored goods secure the
weekly, or monthly basis borrowing.
 WHOLESAILING
Wholesaling is the process of buying/carrying and
merchandising its subsequent resale to
organizational customers, retailers and, other
wholesalers , but not the sale of a significant
quantity to final consumers.
TYPES OF WHOLESAILING
01. Manufacturer Wholesaling 03. Agents and Brokers
The manufacturer handles Brokers and agents facilitate sales
wholesaling directly, controlling without owning the products,
inventory and sales. earning commissions upon successful
transactions.

02. MERCHANT Wholesaling

Wholesalers buy products in bulk
from manufacturers and resell them
to retailers.
 RETAILING
Retailing refers to a business activity involved in the
sales of goods and services to the final and ultimate user
of products for personal, family, or household use.

It is the final stage in a channel of distribution wherein

the products are in the custody of the customer and
eventually to the consumer
Retailing Function in Distribution
Sorting and Assortment
Retailers collect various goods and
services, categorizing them for
consumer convenience.

Consumer Information
Retailers educate buyers through
advertisements, displays, and sales personnel
to prevent product misuse.
Retailing Function in Distribution
Market Research Support
Retailers gather customer feedback on
product features to assist manufacturers
and suppliers.

Merchandising and Pricing

Retailers store inventory, mark prices,
organize displays, and pay suppliers
before selling to consumers.
A. TYPES OF RETAILING
01. Independent Retailer 04. leased department
A single-store business owned and A section within a larger store
operated by an individual or family. operated by an independent retailer.

02. RETAIL Chain

Multiple stores under the same brand
05. Consumer Cooperative
A retail business owned and
and management, ensuring
consistent products and services. managed by a group of consumers
who benefit from its services.

03. retail franchising

A franchisee operates a store using
the brand, business model, and
support of a franchisor.
B. STORE STRATEGY MIX
01. Convenience Store 03. Superstore
A small retail store offering essential A massive retail store that combines
goods, usually open 24/7 for quick grocery items with non-food
purchases. products like clothing and
electronics.

02. Conventional Supermarket 04. Combination Store

A large grocery store providing a A hybrid store that combines two
wide selection of fresh and packaged different types of retail under one
food items. roof.
B. STORE STRATEGY MIX
05. Specialty Store 07. Department Store
– A retailer focused on a specific A large retail store divided into
product category, offering expert sections, each selling different
knowledge and unique selections. product categories.

06. Variety StoRE 08. Retail Catalogue Showroom

A store selling a wide range of low- – A showroom where customers
cost products, usually with a simple browse catalogs, order items, and
layout. pick them up from a warehouse.
C.N0N-STORE OPERATIONS
01. Vending Machines 03. Direct Marketing
– Automated machines that dispense Selling through non-personal
goods or services using coins, cards, methods such as emails, catalogs, TV
or digital payments. ads, or telemarketing.

02. Direct Selling

Selling products through personal
interactions, either at the customer’s
home or via phone.
 STORE LOCATION
It is looking for a better Place selling a certain product.
There are factors to be considered to look for a better
location.

Accessibility to the market

Free from danger
Convenience to the suppliers
Basic forms of store locations
01. Isolated Store
– A standalone retail establishment
with no nearby competing stores.

A gas station along a highway with no other

businesses nearby.
Basic forms of store locations
02. Unplanned Store
A retail store located in an area that
developed naturally without prior zoning
or coordination.

A sari-sari store in a residential neighborhood that emerged

due to local demand.
Basic forms of store locations
02.1 Central Business District (CBD)
The main commercial and financial
hub of a city with high business
activity.

Makati Business District, where major corporations, banks,

and retail stores operate.
Basic forms of store locations
02.2 Secondary Business District (SBD
A smaller business center outside the main CBD,
catering to nearby communities.

Alabang Town Center, serving residents in the

southern Metro Manila area.
Basic forms of store locations
02.3 Neighborhood Business District (NBD)
A commercial area offering essential goods and
services to local residents.

A marketplace with grocery stores,

bakeries, and pharmacies in a suburban
area.
Basic forms of store locations
02.4 String Business District
A series of businesses aligned along a
major road or highway, usually for
accessibility.

Car repair shops and restaurants along EDSA in Metro

Manila.
Basic forms of store locations
03. Planned shopping center
A planned shopping center is a retail complex designed, developed, and
managed as a single unit, with a strategic mix of stores and facilities to serve a
specific market. These centers provide convenience, accessibility, and ample
parking for shoppers.
Basic forms of store locations
03.1 Neighborhood Shopping Center
A small retail center with essential stores like
a grocery, pharmacy, and service shops.

Waltermart, which includes a supermarket, drugstore, and fast-

food outlets.
Basic forms of store locations
03.2 Community Shopping Center
A mid-sized shopping center with a wider
range of stores, including fashion, electronics,
and restaurants.

Vista Mall, offering supermarkets, dining options, and specialty

stores.
Basic forms of store locations
03.3 Regional Shopping Center
A large mall with department stores,
entertainment facilities, and diverse retail
options.

SM City Malls, featuring fashion boutiques,

cinemas, and food courts.
Basic forms of store locations
03.4 Superregional Shopping Center
A massive shopping complex with luxury brands,
high-end restaurants, and entertainment
attractions.

SM Mall of Asia (MOA), with hundreds of retail stores, an arena, and

a seaside entertainment area.
Basic forms of store locations
03.5 Outlet Shopping Center
A retail hub offering discounted products
from major brands.

Acienda Designer Outlet, where customers find

premium brands at lower prices.
Basic forms of store locations
03.6 Theme or Lifestyle Center
– A shopping center designed with open
spaces, unique architecture, and leisure
activities.

Venice Grand Canal Mall, which features European-

inspired canals and gondola rides.
Thank you!
Do you have any questions?

Renato A. Simpao Jr.

Marketing Instructor
renatosimpao@cvsu.edu.ph

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