Why is the selection of the type of distribution critical to the success of the product and the company that is trying to sell it?

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Definition: Distribution means to spread the product throughout the marketplace such that a large number of people can buy it.

Distribution involves doing the following things:

1. A good transport system to take the goods into different geographical areas. 2. A good tracking system so that the right goods reach at the right time in the right quantity. 3. A good packaging, which takes the wear and tear of transport. 4. Tracking the places where the product can be placed such that there is a maximum opportunity to buy it. 5. It also involves a system to take back goods from the trade.

Description: Distribution can make or break a company. A good distribution system quite simply means the company has greater chance of selling its products more than its competitors. The company that spreads its products wider and faster into the market place at lower costs than its competitors will make greater margins absorb raw material price rise better and last longer in tough market conditions. Distribution is critical for any type of industry or service. The best price product, promotion and people come to nothing if the product is not available for sale at the points at which consumers can buy.

In the FMCG industry in India, specially, companies distribute their low-value, high volume products to over 1 million retail outlets, or points of sale. The most successful FMCG companies have the biggest networks, made of factories, stock points, distributors or C&F (Carrying and forwarding agents), wholesalers, retailers and consumers. Nowadays, even direct marketing is considered a feasible distribution channel.

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