The process of distribution and mapping

The sections of distributions:

The concept of distribution
2. Circuits, channels, and distribution networks
3. intermediaries and distribution strategies
4. The mapping

I. Introduction
Once the product leaves the manufacturing plant, it must reach the final consumer.
under the best conditions of cost, time, and services, such is the role assigned to the
distribution. Distribution is a commercial operation that allows for the delivery of the
products from manufacturers to consumers regardless of where they are located.

II. The concept of distribution

1- definition of distribution
A set of activities that take place from the moment the product, in the form
of use, enters the commercial store of the producer or the last
transformer, until the moment the consumer takes possession of it.

2- The objectives of distribution

Distribution objectives can be set by researching the:
. optimal path, at the lowest cost
. correspond to a manufacturer's integration strategy into its channel
business-market
. translate the general objectives of marketing
. determine the references from which the company chooses the strategy of
the most appropriate distribution.

3- The role of distribution

Distribution is considered a link between the producer and the consumer.
she plays a crucial role in marketing as it allows the flow of the
production to the places of consumption in the best conditions.

4- The functions of distribution

We distinguish two main types: physical distribution and associated service:

a) Physical distribution
. Transport
 Transport allows the delivery of the product to the consumer.
Transport must be planned to ensure its effectiveness, it requires a
organization based on the distribution of warehouses and clients, of their
number of geographic dispersion and the number of vehicles used.
. the aggregation of demand
It is an important function for a distributor in relation to a producer.
The existence of intermediaries allows the producer to deal only with a ...
limited number of interlocutors rather than serving every client in the market.
. storage and provision
The storage carried out at different levels in the distribution circuit allows
to adjust supply and demand over time and to make the product
instantly available.
. The assortment
Transforming production lots into sales assortments, that is to say,
select the offers and determine which products and services should be
offered in the sales outlets.
b) Associated services
. The financing function
The financing function is ensured by the intermediaries when they
buy from producers and take on the risks of
commercialization. They pay for production without the producers being
forced to wait for the end consumer to have purchased their products.
. Customer services and after-sales service
These include, for example, information, advice, delivery, installation,
possible take-back of products, maintenance, and distributions sometimes made to
title of a guarantee.
. Communication
Distribution is a means of communication. This is reflected in the display.
prices, packaging, merchandising, salespeople advice on the points
sales, advertising and promotions at the point of sale.

III. The circuits, channels, and distribution networks

1- Distribution circuit:
A distribution circuit is called the set of stakeholders that facilitate a
product from its state of production to its state of consumption
2- The distribution channel:
Defined as the set of institutions that support physical flows and flows
information enabling the purchase of products by the end buyer
3- The distribution network
The distribution network is defined as a set of people who
contribute to the sale of a good or service, from the producer to the
final consumer
Types of distribution circuits
The three main types of distribution are:
Direct circuits without intermediaries: direct distribution for the producer.
Short circuits only involve one intermediary.
The circuits involve several intermediaries.

Distribution mode and circuit length

A) The direct circuit

It is characterized by the absence of any independent intermediary between the producer and
the consumer
 Advantages disadvantages
The organization and management very
a better qualitative understanding
heavy from the sellers
and quantitative market
Logistics costs are very high.
Good knowledge of the clientele
(storage costs, costs
better communication and a
storage)
total control
Financial costs are important.
the speed of distribution
High storage charges
the circuit shows greater
flexibility -…

-…

B) The short circuit

It is a circuit where a distributor acts as an intermediary between the producer and the customer.

Advantages disadvantages
The
The direct relationship is close between the producer loses his contact
direct with the consumer
clients and the retailer allows
more advantage for the latter a high storage costs

better market knowledge The producer fulfills the function of

The wholesaler margin is big, which incurs high costs

saved The intermediary acts based on

The price at the consumer level his interest which is still not the

final and more appealing even with that of the producer

-good price control due to the absence -…

of
wholesaler
-…
C) The long circuit
These are traditional circuits: producers deal with wholesalers who
each work with multiple retailers
 Advantages disadvantages

The decrease in billing fees and The loss of contact with the retailer
and the dependency on
transport
wholesalers
-The exploitation of all markets and
Producer margins are decreasing
let's benefit from the know-how of
distributor The infidelity of wholesalers.

Regulation of sales through poor circuit control

stock of intermediaries. -…
no storage fees
good geographical repair of
points of sale
-…

The choice of a distribution channel: (how a producer will sell their

product ?)
There are two important criteria: the external factor and the internal factor of the company.

A) The external factor

At the market level, it is important to take into account the competitors,
clients, distributors, and regulations.

B) The Internal Factor

At the level of the company, it is about taking into account the characteristics of
the company, the product, the costs of the circuit, and the brand image.

IV. Intermediaries and Distribution Strategies

Intermediate
The intermediary represents the person or company intervening between the
producers and consumers: they ensure a link between supply and demand. The
the most important intermediaries are: wholesalers, independent retailers, and
the purchasing centers.

A- Wholesalers: it is a commercial intermediary purchasing the

merchandise directly or manufacturer to resell to retailers.
 B- Retailers: it is a business intermediary purchasing the
merchandise to a wholesaler or a manufacturer for resale to the user or
to end consumers.

C-Purchasing Center: it is an organization aimed at marketing

the order of a certain number of stores and to make my purchases
directly from the manufacturers under the best conditions.

The role of intermediaries

The principle of the demultiplication of contacts

A) The multiplication of contacts

As shown in the figure, the number of contacts needed to organize a
the interaction between all the partners in the exchange process is much higher
in an intermediary system

B) Economies of scale
By pooling the offers from several producers, the intermediary is able to exercise
the functions assigned to it for a larger volume

C) The best assortment offered

The role of the intermediary is to create a variety of assortments, thus allowing
to customers to purchase a wide variety of products in a single transaction
 approach, which will help reduce the time and effort required to find the
products that they need.

D) The best service

A distributor will only survive in a distribution circuit as long as the
other partners in the exchange process. The intermediaries exert
functions better than they could do themselves or than other institutions

[Link] strategies
There are three strategies: the intensive strategy, selective strategies, and the strategy.
exclusive.

A) The intensive strategy

The company aims to reach as many points of sale as possible and to
multiply the storage center in order to ensure high sales revenue
as well as maximum coverage of the sales territory

advantages disadvantages
An increase in costs of the
Maximize availability of
distribution
products
Give a market share - A risk of losing control of one's

important marketing policy.

-… -…

B) selective strategies
The company consists of selecting a limited number of distributors based on
their quality of technician or brand image. This coverage strategy is
indicated for products of considered purchases, where the customer compares prices and the
product characteristics.

advantages disadvantages
The risk of not ensuring a
Reduce distribution costs
Obtain better cooperation from sufficient market coverage
Strategy attacked by the big
the share of its distributors
-… distribution
-…

C) The exclusive strategy

 The extreme form of selective strategy. On the other hand, the exclusive strategy is a
market coverage policy under which the manufacturer grants a
name of the reseller the exclusive right to distribute its products in an area
geographical data. This exclusive coverage strategy is useful when the
The manufacturer wants to differentiate its product through a high-quality prestige policy.
or service quality.

advantages disadvantages
A weak geographical coverage
A strong brand image
A need to stimulate and animate the
A very good control by the producer.
-… distribution network.
-…

4. Cost analysis of distribution

The cost of a distribution channel is measured by the distribution margin, that is to say
by the difference between the selling price to the end user and the price paid to the
producer by the first buyer.
The measurement of cost by the distribution margin is carried out as follows:
Distribution margin: MD = P - C
P: selling price to the final user (consumer).
C: price paid to the producer by the first buyer: purchase cost.
Expression of this distribution margin as a percentage:
So it is in relation to the selling price: MD/selling price.
Or based on purchase: MD/purchase price.

What is process mapping?

The mapping of a company's processes is a graphical representation of all the

processes linked together by logical connections of information, material, or production.
It provides an overview of the company's activity and allows for understanding in a way
objective the organization of work.
 Example of process mapping of a company:

Mapping of processes and ISO 9001 version 2015 standard

Process mapping is an approach that allows one to meet several requirements.

from the ISO 9001 standard, but it is not a requirement for organizations.
This standard, quality certification, advocates for organization through processes.
process mapping is the foundation of this organization, particularly thanks to the
formalization of the company's macro-processes.
The ISO 9001 standard also requires a customer-oriented organization, facilitated and implemented in
light through process mapping. The latter also highlights the activities
directly to the customer service and the added value created by each of these activities.

VI. Conclusion
Distribution is an essential function, indispensable for all businesses.
especially in its marketing approach. Its performance is considered an asset
major, it encompasses several strategies that the company must choose in order to achieve its
objectives.