Before we delve into distribution technology and other of its details, let us first learn about the term distribution technology itself. Distribution as seen simply means the process of giving out products. In marketing and business sectors, the term distribution refers to the spread of the products in the marketplace so that more people can buy them easily.
What Does Distribution Technology Include?
As we have now seen the definition of distribution technology, let us now take a look over what distribution technology comprises.
- The first and the foremost necessity of the distribution technology is a good and reliable transport system that helps it to transfer goods to different geographical areas.
- The next important factor for distribution technology is a good tracking system. This would ensure the right amount of goods being transferred at the right to the right owner.
- Then comes another important factor of this technology that is a good packaging system. This would ensure the safety of the product inside the package. Packaging must always be done with a strong material that also takes up the wear and tear along the road.
- The next unique yet crucial step to distribution is tracking those places where the demand is high. This will increase the opportunity for potential customers to buy the product.
- Last but not least, it also includes a system that takes back the product to the trade.
Hence, we can see that distribution technology forms the backbone of every company. Therefore, if a company has a good distribution technology then it means that it is able to sell its products to the potential customer at a larger rate than other companies in its competition. This affects the goodwill of the company in the market and increases the company’s profit-making capacity.
Different Kinds of Distribution Technologies
Different distribution technologies inc use different kinds of distribution technologies that suit the business pattern of working. Basically, the distribution in different companies are broadly categorised into two categories i.e. direct and indirect distribution. The distribution is further nuanced under the various categories like intensive, selective and extensive distribution. Let us take a brief glance at the different types of distribution technology.
- Direct distribution
The method of direct distribution is a strategy where the manufacturers sell their products and services directly to the consumers without any inclusion of the third party. Nowadays, some companies also take a modern approach and take their business online where the consumers can make the purchase online. Another method of direct distribution includes selling products with the help of a catalogue or phone orders. Manufacturers keep in mind the amount of investment they have to spend in order to store their goods.
- Indirect distribution
This is where the manufacturers include the third party or the middleman that helps in the distribution of their goods. These middlemen or the third parties help the manufacturers to get potential consumers for their products.
- Intensive distribution
This is quite a different type of distribution that includes putting products into different retail locations in order to reach intensive distribution. One of the significant and most seen examples is vending machines that have been installed at several different places. Therefore, with the help of the intensive method of distributing, the goods are made available at several different locations to increase sales.
- Exclusive distribution
In exclusive distribution technology, the manufacturers make a deal with the dealers or the retailers to sell their products to the specific storefront only or when the big brands make use of this distribution technology inc to avail the sales of their goods and products exclusive to their stores only. Like Zara and HM clothes can be found only in their stores.
- Selective distribution
Another type of distribution technology is selective distribution which lies somewhere between the intensive and exclusive distribution. In this case, the products are distributed in more than one location but in as many places as we found in the intensive distribution technology. A perfect example would be the clothing brand stores choosing to operate in selective places. Like Gucci choosing to operate only in the posh areas of the city and also not putting up its products in stores like Walmart or target.
Distribution Technology Risk Ratings
It is evident that in the process of distribution there are already many risks involved throughout the procedure. Due to this reason, the distribution technology also includes risk profiling services in order to help the advisers and the manufacturers to anticipate the potential risks that are involved in a certain distribution technology that they are opting for.
Distribution technology risk ratings also involve the dynamic planner which is an important tool that provides them with the risk assessment and also the expected risk characteristics of any kind of investment fund or the model portfolio for the long term. It is an important tool and plays a vital role in informing about the expected risks and in which distribution technology one should invest more to suffer less risks.
A Little About Energy Distribution Technology
Another distribution technology that very much surrounds us yet we are unaware of it is energy distribution. The energy distribution technology consists of man-made materials that are responsible for transporting energy of different types. The energy includes primary energy material, coal, crude oil and other different energy currencies. All these energies are used to drive the economy and it is produced in the form of electricity, gasoline, natural gas or any medium that plays a role in transportation. In a nutshell, this is where the energy is produced at the final stage and then distributed to the other distribution technology groups.
So, this is how different distribution technology groups operate within the business sector and play significant roles in the day to day operations of the business.
Latest Articles