distribution process

Distribution of

“Lux Soap”

SUBMITTED TO SIR SOHAIL MAJEED

SUBMITTED BY:

KARISHMA ZAHID(296)

MAHEEN SHEIKH (391)

MUHAMMAD SOHAIL (478)

UMAIR ASHRAFI (451)

Tayyaba Ansari (690)

Rehan Riaz (336)

TOPIC: DISTRIBUTORS 2012

Contents

DEFINITION:.................................................................................................................................................4

“...................................................................................................................................................................4

BENEFITS:....................................................................................................................................................4

MAIN WORK OF DISTRIBUTOR:...................................................................................................................4

JOB DESCRIPTION OF DISTRIBUTION MANAGER:........................................................................................4

INTEMEDIARIES OF DISTIBUTION:...............................................................................................................5

WHOLESALER:..........................................................................................................................................5

RETAILER:.................................................................................................................................................5

DISTRIBUTOR:..........................................................................................................................................6

DISTRIBUTION OF CONSUMER PRODUCTS:.................................................................................................6

DIRECT DISTRIBUTION OF CONSUMER GOODS:......................................................................................6

RETAIL DISTRIBUTION OF CONSUMER GOODS:.......................................................................................6

WHOLESALE DISTRIBUTION OF CONSUMER GOODS:..............................................................................6

DISTRIBUTION THROUGH SALES AGENTS OR BROKERS (DISTRIBUTORS):...............................................7

DISTRIBUTION OF BUSINESS PRODUCTS:................................................................................................7

DIRECT DISTRIBUTION OF BUSINESS GOODS:..............................................................................................7

WHOLESALE DISTRIBUTION OF INDUSTRIAL PRODUCTS:........................................................................7

WHOLESALE DISTRIBUTION TO BUSINESS RETAILERS:............................................................................7

DISTRIBUTION STRATEGIES:........................................................................................................................7

1. INTENSIVE DISTRIBUTION:...............................................................................................................8

2. EXCLUSIVE DISTRIBUTION:...............................................................................................................8

3. SELECTIVE DISTRIBUTION:...............................................................................................................8

IMPORTANCE OF DISTRIBUTION:................................................................................................................8

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SUPPLY-CHAIN MANAGEMENT:..................................................................................................................8

DISTRIBUTORS’ MARKET SEGMENTATION, TARGETING & POSITIONING:...................................................9

SEGMENTATION:.....................................................................................................................................9

TARGETING:.............................................................................................................................................9

POSITIONING:..........................................................................................................................................9

PROCESS OF DISTRIBUTION:......................................................................................................................10

Functions of Distributor:............................................................................................................................10

1. INFORMATION:..............................................................................................................................11

2. PROMOTION:.................................................................................................................................11

3. CONTACT:......................................................................................................................................11

4. MATCHING:....................................................................................................................................11

5. NEGOTIATION:...............................................................................................................................11

6. PHYSICAL DISTRIBUTION:...............................................................................................................11

7. FINANCE:.......................................................................................................................................11

8. RISK TAKING:..................................................................................................................................11

ADVANTAGES OF DISTRIBUTORS:..............................................................................................................12

SURVEY CONDUCTED ON DISTRIBUTION:..................................................................................................12

COMPANY NAME:......................................................................................................................................12

LOCATION:.................................................................................................................................................12

FACILITATOR:.............................................................................................................................................12

PRODUCT FOCUS:......................................................................................................................................12

Product Introduction:................................................................................................................................13

Variety in LUX soap:...................................................................................................................................13

Distributors of LUX:...................................................................................................................................13

Distribution procedure of LUX:..................................................................................................................13

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Main Cities in Pakistan where LUX soap is distributed:.............................................................................14

Distribution of LUX soap according to Regions:.........................................................................................14

Supply Chain of LUX:..................................................................................................................................14

Distributor Competitive Strategy:..............................................................................................................14

LUX soap factory perform following functions:.........................................................................................14

CONCLUSION:............................................................................................................................................15

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“DISTRIBUTION:”

DEFINITION:

Distribution is part of marketing in which we place our product or in other words, we distribute

our product or service for selling. It is a process in which we supply our product to retailers and

distributer. The process in which purchasing, storing, and reselling is done to retailers, distributer

or to direct to the customer.

“Distribution is done by a person known as “distributor”.

BENEFITS:

It is also useful for companies. As distribution function are assumed by companies to take

competitive advantage.

Distributors, retailers have their expertise in availability of product or service to the target

market so it will be effective for our business to hire a person who has expertise in his

perspective work or department.

Distribution makes the work of manufacturer easier. He does not have to worry about the

selling of product and his target customer. He can focus on its core business of making

products.

MAIN WORK OF DISTRIBUTOR:

The distributor and manufacturer negotiate price for bulk purchases, and the distributor makes

sure that product is marketing to its retail client. Product is sold at wholesale price to its retail

client by distributor. Now manufacture gets productsavailable on wide networks of retail outlets

without incurring the expense of maintaining that network.

JOB DESCRIPTION OF DISTRIBUTION MANAGER:

Distributors are the strategic planner of transport of product and have great sense of observing

that is how he can observe the shipping from the distribution centers, to ensure the products are

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delivered in an accurate and timely manner. He works with company’s management team and

marketing executives to make sure products are reaching on time, while maintaining a low cost

margin. He should be assured that safety rules and regulations are met.

He also takes care of warehouses and manages that shipping, receiving, delivering, achieving of

products are going on in proper way. It is also his responsibility to maintain warehouses and

loading docks in good manners.

The operations of getting goods and products for purchase from the warehouse to the supplier the

operations of getting goods and products for purchase from the warehouse to the supplier are

also overseen by distributor manager. He should be graduated or having master degree from

business school in distribution management or business administration. Usually companies hire

distribution manager for retail chains, businesses, manufacturing plants and whole selling.

Large organizations hire distributor manager to direct the movement of goods from the producer

or place in which they made their way to customer or to sell their product.

INTEMEDIARIES OF DISTIBUTION:

There are three main intermediaries of distribution:

WHOLESALER:

A wholesaler acts as an intermediary between the producer and retailer. It actually collects the

good from the (place of origin) manufacturer and resells it to the retailer, keeping a small

percentage of profit. It provides some services to the retailers.

RETAILER:

A retailer is an intermediary between the wholesaler and the final consumer. It purchases the

goods from the wholesalers in bulk or large quantity and resells it to the final consumer. It is the

only mean which meets the customer’s requirements. Retailers sell the goods in small quantity or

sometimes single unit.

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DISTRIBUTOR:

A distributor is an agent or broker who acts as an intermediary between the supplier and the

wholesalers and sometimes retailers as well. It provide services to manufacturer , that is it help

them for the promotion and advertising of products and also the wholesalers or retailers, such as

insurance of goods, transportation, warehouse services, credit facilities etc. They represent the

producers and deal with related product lines of many products. They receive commission on the

prices of the goods they sell.

DISTRIBUTION OF CONSUMER PRODUCTS:

Following are the distribution channels used for distributing consumer goods:

DIRECT DISTRIBUTION OF CONSUMER GOODS:This is a distribution channel in which a product is directly been sold to the final consumers form

the producer, without any means of intermediaries. This method of direct selling mainly uses

internet to advertise and also to take order from the final consumers. For example, Dell was the

first company who has introduced the concept of direct selling in computers. In Dell order was

taken on internet by the consumer, payment was made through credit cards and there was no

distribution intermediary. These are the companies who uses direct distribution. HP, Sony, Apple

and Microsoft etc.

RETAIL DISTRIBUTION OF CONSUMER GOODS:

In retail distribution, the products are distributed by the retailers from the retail shops. For

example, Nike is a brand, which has its own outlets. These outlets are basically the retailers of

the brand. Nike also has a factory outlet, which is the main producer of the brand.

WHOLESALE DISTRIBUTION OF CONSUMER GOODS:

In wholesale distribution, large quantity of goods is purchased by the retailers for reselling it to

the end-users. Wholesalers offer storage facilities to the retailers and then restock it. For

example, the retail distributor of Olpers Milk buys a large number of cartons from the

wholesalers and gets some discount and then the retailer deals with the final consumer is selling

them 1 pack or carton of milk pack.

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DISTRIBUTION THROUGH SALES AGENTS OR BROKERS (DISTRIBUTORS):

In this, the distributors collect the goods from the producer and resell it to the wholesalers or

retailer but not the final consumers. In case he sells the good to the retailers, the wholesalers are

eliminated from the process, but, if the individual or firm resells it to the wholesalers, then

retailers are there to deal with the end-users of the product. These distributors take commission

from the producer on the prices of the goods they sell. For example, Travel agents represent

airlines, car-rental companies and hotels.

DISTRIBUTION OF BUSINESS PRODUCTS:

Industrial channels play a role in the distribution of the business products. Companies also buy

products to make their own products in business to business dealings. For example, a biscuit

company purchases milk, flour, butter, oil, sugar and other raw materials from other companies

to make their own product.

DIRECT DISTRIBUTION OF BUSINESS GOODS:

In direct distribution, goods are sold to the industrial buyer by the manufacturer of the other

company. There are no intermediaries, and they are often not needed.

WHOLESALE DISTRIBUTION OF INDUSTRIAL PRODUCTS:

All the office supplies and equipment’s are dealt with the wholesalers. They act as an

intermediary, when manufacturers produce goods in large quantities they help the final

consumers by providing them limited quantity.

WHOLESALE DISTRIBUTION TO BUSINESS RETAILERS:

Since the trend is changing now, businesses purchases office supplies and equipments from the

office discount stores. These superstores instead of selling in large quantities actually target retail

consumers and small business firms for their products.

DISTRIBUTION STRATEGIES:

These strategies are made to target maximum number of customers in the most effective way.

They are following:

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1. INTENSIVE DISTRIBUTION:

This is a distribution strategy to make the product available by using different distribution

channels. It is made for the low-cost consumer goods such as magazines, chewing gums etc.

2. EXCLUSIVE DISTRIBUTION:

Exclusive distribution strategy is made by the manufacturer who puts exclusive rights on

distributing his product or service to only few wholesalers or retailers in certain areas only. This

strategy is made mainly for branded products such as Gulahmed and Gucci watches etc.

3. SELECTIVE DISTRIBUTION:

This strategy is made by the companies to assign wholesalers and retailers for the promotion of

some selective products. It is used mainly for consumer goods such as furniture and electric

appliances etc.

IMPORTANCE OF DISTRIBUTION:

Distributors play a great role in transferring the goods from the producer or manufacturer and

then make it available for the final consumers. If there would be no distributor, all work would

have been done by the suppliers. Distribution channels though have extended the process but

have given a great relief to the producers. Moreover, distributors supply the final consumers

within less time. They act as intermediary between the manufacturer and end-user. These

distributors have expertise in knowing the target markets of the products. They also help the

producer in advertising the products. So, today distributors are the back-bone in the process of

getting the products to the final consumers. They have minimized the complexity and has added

value to the process. They also forecast the market demand and supply of the products.

SUPPLY-CHAIN MANAGEMENT:

Supply chain management is somehow linked with distribution. It is the whole process of

managing the raw materials, finished goods, logistics and information system needed to control

all activities. The efficient supply chain activities add value to maximize customer’s satisfaction

and gain a competitive advantage.

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DISTRIBUTORS’ MARKET SEGMENTATION, TARGETING & POSITIONING:

SEGMENTATION:

Today’s market has a dynamic environment. People with different needs are dispersed all

around. They are segmented according to their lifestyles, economic conditions, geographically

etc. It is very important for the distributors to know the market segment, where he can deliver the

goods and meet the needs of the consumers. Therefore, they actually identify the specified

market. Through their contacts and experience, they know the demand for the goods in the

particular market segment.

TARGETING:

It depends on the type and quality of the product when it is targeted. For a high-cost product,

they are usually less number of buyers, so direct selling method is used for the distribution. They

are mostly for branded products. For a low-cost product, indirect selling method through a

retailer is used. When market segmentation is done, we got to know our customers. We know

which market segment is to be targeted to attract the customers towards the products.

POSITIONING:

Positioning is done by making a company’s image in the customer’s mind. Customer’s service,

advertising and marketing of the products make the company’s image. The company’s

manufacturers offers thousands of products in the market each with its own position, this is how

customer’s loyalty and company’s image is built.

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PROCESS OF DISTRIBUTION:

Following are the steps of distribution:

FUNCTIONS OF DISTRIBUTION:

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DISTRIBUTOR

INFORMATION

PROMOTION

CONTACTMATCHINGNEGOTIATION

PHYSICAL DISTRIBUTION

FINANCING

RISK TAKING

Factory Factory is the place where all raw materials are transformed into finished products and are ready for the final consumers.

Company WarehouseGoods brought from the factory are kept in the warehouse. It is stock goods which will be made available for sale in future.

Distributors Distributors collect those goods from the company's warehouse to resell them to wholesalers or retilers.

Wholesalers/ Retailers

If wholesaler takes the goods from the distributor, he resell it to the retailer and then retailer resells it to the final consumer.

Final Consumer Finally the goods are avialable to consume through the distribution channel of retailer.


1. INFORMATION:

Distributor collects information about and demand and preference of consumer about the

products.

2. PROMOTION:

The distributor sometimes advertises the products on behalf of the producers. They are involved

in the promotional activities.

3. CONTACT:

Distributors have many contacts with the retailers and wholesalers; therefore he can easily help

the producer in distributing the finished goods to final consumers.

4. MATCHING:

They distribute the goods which match with the buyer's needs, regarding packing as well.

5. NEGOTIATION:

Distributor negotiates with the producer and the wholesaler or retailer and finally the both parties

agree on final terms &conditions.

6. PHYSICAL DISTRIBUTION:

Distributors deliver the goods to the wholesalers or retailers and offer them storage facilities.

7. FINANCE:

They acquire and use funds to cover the costs of the distribution channel.

8. RISK TAKING:

Distributor is assumed as a risk-taker when he holds large amount of stocks.

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ADVANTAGES OF DISTRIBUTORS:

Distributor controls inventory in the market.

Advertise the product and promote the products.

Distributor knows the demand and supply of the goods in the market.

Distributor manages all the trouble in the market.

A distribution through distribution channel is less costly for the company rather than

direct selling.

A company gain competitive advantage from good distribution system.

A distributor play significant role in making the goods available in the market.

Distributors all add value to the product.

Distributor is a firm or individual who actually built a strong and loyal relationship with

the manufacturer and retailer.

SURVEY CONDUCTED ON DISTRIBUTION:

COMPANY NAME:

Apex Marketing Services- Unilever Pvt. Ltd. (Distributors)

LOCATION:

L-28C Block 21 FB Industrial Area Near Sajjan Kanta Opp Shell Petrol Pump & Gulberg Town

Office Main Rashid Minhas Road.

FACILITATOR:

Mr. Adeel Yasin

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PRODUCT FOCUS:

“LUX” Beauty Soap

Product Introduction:

LUX soap was first launched in 1916. LUX has been widely advertised in Pakistan for more than

50 years. LUX is the leading soap brand in Pakistan. The tagline of LUX is “STAR LIKE

BEAUTY”, that’s why it is stylish class of Pakistan. LUX always like as (pure and mild )

solution to soft and smoothly skin. The current market share of LUX is……..

Variety in LUX soap:

LUX Peach & cream

Crystal Shine

Magical Beauty

Aqua Sparkle

Distributors of LUX:

Metro

Makro

Apex

Molan & Philips

Distribution procedure of LUX:

Distributors collect all the data from the distribution department of Unilever.

The main factory of LUX soap is suited in Rahim Yar Khan, so the sales department makes

contract on behalf of the company for the sale of the product.

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All the sales are conducted through the sales department from advertising to selling.

Main Cities in Pakistan where LUX soap is distributed:

Karachi

Faisalabad

Wazirabad

Lahore

Rahim Yar Khan

Dera Ismail Khan

Multan

Distribution of LUX soap according to Regions:

Central (40%)

South (30%)

North (30%)

Supply Chain of LUX:

The supply chain of Unilever Distributor is so efficient that they are less chances of shortage of

LUX soap in the market. Distributors of Unilever are working on high scale to facilitate their

customers on time. They work according to the demand of soap in the market.

Distributor Competitive Strategy:

Unilever private Limited company uses a centralized system of distribution of all the products.

Its main competitive strategy is to receive goods in its warehouse in small quantity, not in stocks,

with in no time; all goods are distributed among the wholesalers and retailers for final

consumers. This can minimize some steps in the distribution and also reduce their cost. Since

they are experienced, they are more committed in improving process globally.

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LUX soap factory perform following functions:

Collect soaps from the production department.

Ask for plans of distribution from sales department

Make their plan of distribution for daily basis.

Arrange for the delivery of the products.

CONCLUSION:

After a thorough research on distributors, we have realized the importance of distributors and

distribution channels. We living in a modern age needs automation in every process, therefore,

when a good is made in a production department, it needs to be available to the final consumer,

so the distributors acts an intermediary and helps the manufacturer in reaching the goods to the

consumers. By means of distribution channels, whole process has become very fast. Moreover,

every person is specialized in the process because the producer is concern for producing goods

only and the distributor is concerned to distributing the goods to the consumers. Therefore,

distributors play a great role in the distribution process. They also promote the producer’s goods

and takes commission on it.

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distribution process

Documents

chain management

competitive advantage

small quantity

companys image

large quantity

large quantities

final consumer

retail client