Problems faced by companies in the distribution system is divided into two parts, namely : towards upstream or directly related to manufacturing and downstream towards directly related to the retailer and end user. In the downstream direction there is a problem for which the product is difficult to predict and unstable, and the number of requests that are often not reflect the needs of today’s consumers. While the upstream direction, the demand for the supply of goods which can not always be fulfilled according to the time required.
Distribution Chain process can be generally described in the figure below, namely :
Distribution Chain Process
If the company’s distribution system has a principle to be able to meet customer demand, the high level of service. But the wisdom that can be hit by the problems in the downstream and upstream so that the company should have the priority scale consequences.
Corporate limits in choosing a high priority on profit. This should be done if you do not want to lose customers, because of the cost required to return the loyalty of consumers towards its products much more expensive. Therefore companies need to review the logistics and distribution systems dimiliknya as a whole, so the problem can actually be found and eliminated, and finally able to increase system performance.
To create a competitive advantage a company must establish Distribution Strategy are :
1. The selection of distribution channels
2. The intensity of market coverage
3. Physical handling of products during distribution
The Role of Distribution Channels in marketing strategy :
1. Assist in the process of moving goods by reducing the amount of contact / transaction directly.
2. Adjust the differences in market demand for goods by way of sorting.
3. Standardization transfer transaction.
4. Facilitate the search process between producers and consumers.