Six steps to distribution network design

Six steps to help a manufacturer calculate the best distribution network for its products or services are: 1. Understand the total market demand and the growth rate for the firm's products. 2. Use the proper measure of coverage. 3. By customer segment, consider how end customers select dealers...

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Bibliographic Details
Published in:Business horizons 1991, Vol.34 (1), p.48-52
Main Authors: Magrath, Allan J., Hardy, Kenneth G.
Format: Article
Language:English
Subjects:
Dealers
Design
Distribution
Distribution (Commerce)
Distribution channels
Distribution of goods
Distribution planning
Guidelines
Management
Manufacturers
Manufacturing
Success
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Summary:Six steps to help a manufacturer calculate the best distribution network for its products or services are: 1. Understand the total market demand and the growth rate for the firm's products. 2. Use the proper measure of coverage. 3. By customer segment, consider how end customers select dealers or retail outlets. 4. Be clear about the desired mix of dealers or retailers. 5. Consider the capacity of each dealer or retailer. 6. Set up only as many dealers or retailers as can be well serviced. In determining optimal distribution network design, a manufacturer always should start with assessments of market potential be region and follow this with a detailed analysis of customer buying preferences. From this, the firm can gauge how many resellers are needed in each location by type of reseller channel to exploit specifically targeted segments.
ISSN:0007-6813
1873-6068
DOI:10.1016/0007-6813(91)90081-6