Using physical distribution strategy for better channel management

Abstract

Physical Distribution (PD) while given a great deal of attention in the marketing literature during the past decade, has not been examined explicitly in terms of how it interfaces with channel management. Yet an understanding of PD-channel management interfaces is necessary if the marketer is to play a role in shaping the firm's PD strategy so that it is more likely to foster channel member cooperation rather than conflict. PD interfaces with channel management in at least four areas: (1) defining channel member service standards, (2) making sure a proposed PD program meets these standards, (3) the selling of the program to the channel members, and (4) monitoring the program once instituted to determine if it contributes to fostering channel member cooperation. Regardless of how the manufacturer treats the PD function from the stand-point of his own internal organization structure, there is no escaping these PD-channel management interfaces. Consequently, the marketer who is concerned with the channels aspects of the manufacturer's overall marketing strategy has an important role to play in influencing the firm's PD strategy so that it helps to enhance channel member cooperation.