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Dynamics of Distribution & Logistics: Distribution Channel Design and Management

The document discusses distribution channel design and management. It describes various gaps that can occur between production and consumption like time, space, quantity, and variety gaps. It also discusses channel tasks and flows including physical possession, ownership, promotion, negotiation, financing, risking, ordering, and payment.

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wasif ahmed
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20 views5 pages

Dynamics of Distribution & Logistics: Distribution Channel Design and Management

The document discusses distribution channel design and management. It describes various gaps that can occur between production and consumption like time, space, quantity, and variety gaps. It also discusses channel tasks and flows including physical possession, ownership, promotion, negotiation, financing, risking, ordering, and payment.

Uploaded by

wasif ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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2/10/2021

Dynamics of Distribution & Logistics

UNIT 03

Distribution Channel Design and Management


Channel design and management follows a structured approach,
using criteria which evaluates optional channel structures during
which alignment (compatibility), trade-offs and channel
relationships are considered.

Increasingly, the role of logistics service companies is included in


the decision process, particularly when they are a dominant
element within the supply chain.

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2/10/2021

Channel Tasks
The reasons for the presence of intermediaries in markets have
been questioned for some time.

Their existence has a long history: trading intermediaries have


existed for thousands of years.

The more recent reasons have been important since 'mass


production' methods emerged from the industrial revolution,
when it became clear that production advances brought with them
new tasks for the market, as 'gaps' occurred between production
and consumption Alderson (1954).

Channel Tasks
Alderson described the five gaps as:
• Time gaps: occurring because consumers typically purchase
items at discrete intervals (most food products weekly; consumer
durables every three/five years); manufacturing produces on a
continuous basis thereby ensuring it takes advantage of
economies of scale.

• Space gaps: consumers are usually located throughout a


market; manufacturing is centralized.

• Quantity gaps: manufacturing activities result in large


quantities; consumption occurs in small quantities.

• Variety gaps: typically manufacturers' production ranges are


narrower than that preferred by consumers

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Channel Tasks
Subsequently Guirdham (1972) added an additional gap: •
• Communication/information gaps: often the consumer is
unaware of exactly what it is they require, from where it can be
obtained and its availability and price. In recent years the
communications/information gap has been influential in closing
many of the other gaps.

Channel Tasks
Another conceptual view of marketing channel activities and of
particular relevance to logistics was proposed by Vaile et al.
(1952), who discussed specific marketing flows within channels.
These comprise:

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Channel Tasks
Another conceptual view of marketing channel activities and of
particular relevance to logistics was proposed by Vaile et al.
(1952), who discussed specific marketing flows within channels.
These comprise:
• physical possession,
• ownership,
• promotion,
• negotiation,
• financing,
• risking,
• ordering and
• Payment

Please note that each activity takes place at various levels of a


channel

Channel Tasks

Marketing flows in channels

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Channel Tasks

Channel flows and specialist activities

Thank you

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