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What Is Strategic Distribution?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 31 May 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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Strategic distribution is a type of approach to the process of distributing goods and services to customers in a manner that is considered cost-effective, efficient, and timely. The process focuses on the creation and maintenance of a distribution network that begins with providing consumers with options for order placement, continues on through the tasks required to prepare that order for fulfillment, and even on to the actual delivery of that order. By utilizing solid business planning skills to ensure that every aspect of the process from order placement all the way through to delivery is operating at optimum efficiency, the company stands a better chance of retaining that client and attracting new customers on a continual basis.

The beginning of strategic distribution has to do with making it easy for customers to place orders. Typically, this means providing several different ordering alternatives. Along with traditional methods such as offering goods in a retail store and providing the ability to place orders by way of a telephone call or by mail, many companies today also use the Internet as a means of accepting and confirming receipt of orders. This includes online stores that offer the ability to place and pay for orders any time of the day or night. In addition, the ability to place orders using a handheld device to scan an icon and place an order has also become more common.

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Strategic distribution does not end with offering multiple options for ordering. Once an order is placed, the process will move on to actually preparing the shipping of that order. Typically, this will mean packing the order, preparing the paperwork to accompany that order, and selecting the mode of delivery. That delivery mode may range from using the post to a specific courier service or even a freight line, depending on the size and weight of the item ordered. Here, the goal is to make sure the shipping method selected is cost-effective but will still allow the order to be delivered in the time frame promised to the client.

The process of strategic distribution also calls for evaluating what actually happens with the delivery. To this end, the business will assess how often orders are delayed due to some internal issue, or because of some sort of problem within the shipper’s network. This provides the opportunity to address the origins for those delays and find ways to minimize or possibly even eliminate them in the future. Doing so helps to increase the level of customer satisfaction and remove the possibility that a customer will turn to a competitor who is perceived to be more efficient with the delivery process.

As an overall business activity, strategic distribution helps to ensure that a quality product gets to customers in a timely manner. Even the most high-quality product will fail to generate ongoing interest from customers if they cannot order the item with some degree of ease or have to wait for long periods before actually receiving the order. In addition to the benefits of creating customer loyalty, taking steps to make sure the distribution network is working at full efficiency also helps to keep operational costs within reason, a factor that ultimately means additional net profits for the business.

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