Distribution Channel Decisions and Logistics
Every firm like the GWC Valve company chooses how to distribute its goods and its services. They must decide what channels they will use and what the degree of intensity will be in each channel in order to be able to reach their target market. When selecting distribution channels, there are some common ideas regarding complex, standardized, and start-up products. The complex distribution channels are expensive, custom made, or they are perishable products that move through shorter distribution channels involving few or no intermediaries. The standardized products or items with low until values usually pass through relatively long distribution channels. When it comes to the start up products, companies often use direct channels because they can’t persuade intermediaries to carry their products, or because they want to extend their sales reach.
Retailers are carefully selected to enhance the product’s image to ensure that well-trained personnel will contribute to customer satisfaction. There are different levels of distribution intensity including the intensive distribution, the selective distribution and the exclusive distribution. The distribution intensity is the number of intermediaries or outlets through which a manufacturer distributes its goods. The intensive distribution involves a firm’s products in nearly every available outlet, and requires the cooperation of many intermediaries. For the selective distribution the manufacturer selects a limited number of retailers to distribute its product lines. The exclusive distribution involves the limits that the market coverage in a specific geographical region that will enhance a product’s image.
The choice of distribution channel creates the final link in the supply chain for a company who has physical goods and whom is a retailer. For the supply chain this involves the complete sequence of suppliers that help to create a good or service and deliver it to business users and final consumers. The logistics the process of coordinating the flow of goods, services, and information among members of the supply chain.