Managing Distribution: An Introduction
A distribution channel is the path your product follows to reach the end user, through distributors, wholesalers, retailers, self-service outlets, telephone sales ETC.
I have chosen 2 manufacturers of mass produced products and I will describe in detail how they deal with the distribution channel decision.
The first company I will talk about is the Benetton Group. Today, the Benetton Group is present in 120 countries around the world. It’s core business is clothing. The group produces over 110 million garments every year, 90% of which is manufactured in Europe.
Benetton innovated a technologically advanced system of distribution. The company linked its sales agents, factory and warehouse together using an international electronic data interchange system (EDI). This means if there is an order made in another part of the world, it is sent and placed on a personal computer where the information is collected and sent to the company’s mainframe system in Italy. If the order is not ready, it travels automatically to a machine that cuts the materials and immediately starts to knit the garment. It is then sent to the warehouse where a computer commands a robot to retrieve the garment and any other merchandise that needs to be transported to the same store.
This state-of-the-art system allows Benetton to provide the best of customer service. Everything is sorted automatically.
Another form of distribution channel Benetton adopt is a direct channel which is home shopping via catalogues and courier delivery businesses.
Through efficient management of physical distribution and the use of technologically advanced equipment, Benetton ensures that it’s products are available to consumers when and whe ...