Distribution and transportation,Global Frame Work

Distribution and transportation,Global Frame Work

Amir Shafaghi

ITM Magazine , April 2007


When it comes to talking about transportation market , the most important thing is Iran still is not part of WTO. There is a definite link between being part of this particular organization and having competitive market. Generally our market is not competitive and our transportation market as part of that is not challenging too.

You may ask me why WTO is important. It is important because one cannot deny that most of the countries in the world such as china have joined to this group. We have to be relentlessly candid to ourselves due to the fact that experts strongly support the idea of every country must be part of this organization even if it seems unfair. Some countries like china have understood the point and have been trying to get permanent membership. in this case it will take 15 years for china to be permanent member , however that is not always the case .obviously it is various from country to country .

Few producers sell their products directly to the end users. Firms try to create a marketing channel. Distribution channel is a set of interdependent organizations involved in the process of making a product available for users.

In order to have a strong economy, distribution and transportation it doesn’t do us any good to think WTO has nothing to do with us. I mean transportation market is a competitive market and it cannot survive and keep growing without other countries as business partner.

Nowadays because of the global markets for most of the countries in the world nothing is as important as transportation. it doesn’t matter where your country is and how big your country is .according to get better opportunities you most provide a high level transportation system.

In fact producing a product and making it available to buyers requires building relationship not just with customers, but also with resellers and key suppliers. One can not deny that most firms cannot bring high value to end users just by themselves. Instead, they have to work closely with other companies in a larger value – delivery network.

Firms cannot be isolated from rest of the world and bring high value to end users just by themselves .instead they have to work closely with other companies in a larger value delivery network.

Importance of channels

As in all things, now that we live in new millennium we are facing with a new phenomenon that is called globalization.. in this new brave world channel decisions effect every other market decision. Nowadays channel decisions affect every other marketing decision. For example, the firms sales force decisions depend on how much training, motivation, and support its channel partners need. Many companies have used imaginative distribution systems to gain a competitive an advantage. In contrast, some companies often pay too little attention to their distribution channels.
Managers must design their channels carefully, with an eye on tomorrow's likely selling environment. Because distribution channels with franchisees independent dealers, or large retailers, they cannot easily replace these channel with company – owned stores.

Channel behaviors

Distribution channels are complex behavioral systems. Some of them consist only of informal interactions among organized firms. Other consists of formal interactions guided by strong organizational structures. In fact a marketing channel consists of firms that have involved together for their common aim. All of them depend on each other. And each channel member plays a specialized role in the whole channel. So in order to be successes all channel firms should work together closely.
Anyway some channel conflict will generate which comes from such disagreement over goals, rewards, and roles. They some times disagree on who should do what and for what rewards.

Nowadays, with the proliferation of customer segments and channel possibilities, many companies have adapted a multi channel distribution system which is set up of two or more marketing channel to reach one or more customer segment. This kind of distribution system offer many advantages to companies which are facing large and complex markets. With each new channel, companies expend their sales and market coverage but some of them are harder to control, and they generate conflict as more channels compete for customers and sales.

Channel decisions and physical distribution channel management should select and motivate individual channel members and evaluating their performance over time. Producers vary in their ability to attract qualified marketing members. After selecting, channel members must be continuously motivated to do their best. In fact manufacturers need to be sensitive to their dealers. Those who treat their dealers light risk not only will lose their support but also causing some legal problems.

In today's global market place, selling a product is sometimes easier than getting it to customers. So companies must decide on the best way. Physical distribution and logistics effectiveness has a major impact on both customer satisfaction and company costs.

To some managers, physical distribution involves planning, implementing, and controlling the physical flow of start to point of customer. So the physical distribution starts to point of customer. So the physical distribution task is to coordinate the activities of suppliers, purchasing agents, marketers, channel members and customers. These activities include forecasting information systems, purchasing, production planning and etc.

What are the goals of the logistics system? Some companies state their logistics objective as providing maximum customer service at the least cost. But we all know that there is no such a thing and no logistics system can both maximum customer service and minimize distribution costs. So the aim that marketing logistics should follow is to provide a targeted level of customer service at the least cost.