Components of Physical Distribution Class 12 Notes

Physical Distribution Class 12 explains the concept of physical distribution and its components. Just Manufacturing is useless if it’s not reached the target customers. Physical distribution helps in reaching the product to the target customers and fulfilling their wants. A detailed explanation is given below.

Table of Content

Physical Distribution Class 12

Physical distribution class 12 is an important element of the marketing mix. It is concerned with the availability of goods and services to the right people at the right place and at the right time. This is thus concerned with two factors.

1. The movement of goods from the production place to the consumption place.
2. The channel through which the product will reach the manufacturer to the consumer.

The physical movement of goods

When a product is produced and manufactured then it is branded, labelled, packed, priced and promoted. The consumer will thus get to know about the product and they would want to buy the product for this, the product should be available in the right quantity at the right place. Thus the physical movement of goods from the production place to the place where the consumers demand it is known as physical distribution. There are various important activities which are required to be done so that the physical distribution can take place.

Components of Physical Distribution

The components or elements of physical distribution are as under:

Order processing under Physical Distribution Class 12

As per Physical Distribution Class 12, A good physical distribution channel is an efficient one which will inform the manufacturer as soon as possible about the demand for the product or service and it will be quickly fulfilled by the manufacturer or provider. The order flows from the consumer to the producer while the product will flow from the producer to the consumer and this flow should be really quick so that the consumers can be gained and retained.

Transportation

Transportation means the physical movement of goods from one place to another i.e. from the place of production to the place of consumption. It is very important because unless there is proper transportation of goods the sale will not take place and the demand and need for the product will remain unfulfilled.

Warehousing

Warehousing means storing the goods in one place so that they can be transported when necessary. This creates time utility. Not always the production and consumption time will be the same, sometimes, there is a huge gap between the two activities and this can be fulfilled by pacing the goods at a safe place. Here, the sorting and assorting are done.

Warehouses should be placed at such a location that it is easy to transport the products from warehouses to the place where they are demanded. The location is also important for the kind of product the company is dealing in. When the products are perishable or very heavy, then the location should be as close as possible to the market. For example machinery, food products etc.

The number of warehouses also affects the fulfilment of demand. The more warehouses the company has, the less will be time taken to transport products to the place of consumption. Another aspect of warehousing is its cost. When the firm has more warehouses and prime locations then the cost will rise up. Keeping all these factors in mind, proper consideration should be taken and then the number, place and size of the warehouse should be decided by the firm.

Inventory control under Physical Distribution Class 12

According to Physical Distribution Class 12, Inventory control is an important decision regarding the physical distribution of goods. This means that the level of inventory needs to be decided. The level of inventory decision is closely linked to the warehousing decision. This decision is very important for the products that have a high cost for each unit. The cost will increase if we keep a large stock. The firm will produce in accordance with the demand for the product. But sometimes, to meet the demand as soon as possible, producing a higher number of goods becomes important. This high level of inventory can lead to higher costs. While, with the improvement in technology, the requirement for high inventory has reduced to a certain extent and now Just – in – the time inventory method is on the rise.

Inventory should be maintained based on the demand for the product. Thus, prediction needs to be done for the same. While there are other factors also to be kept in mind while taking an inventory control decision. These factors are as follows:

• The policy and procedures of the firm are also important to be considered regarding the satisfaction of the customer. When the high level of inventory is maintained then the customer can be satisfied in less time as the products will be available easily. If the firm wants to satisfy the customers and is ready to compromise lower costs, then the high level of inventory should be maintained. Otherwise, a balance should be stricken between customer satisfaction and the cost of the product.
• The demand forecasts are done to know the demand for the product and thus help in maintaining the inventory/stock. When the forecasts are more accurate then the need for maintaining a very high level of inventory can be reduced to a large extent.
• The distribution channel which the company chooses is also an important factor to be considered. When the response of the distribution channel is quick then the level of inventory can be maintained at low levels but when the channel is slow then the time taken to respond to the demand will be slow. Thus, a channel which is quick and is able to meet the demand in less time will be helpful in maintaining lower levels of inventory.
• The cost is also as important as other factors because keeping the cost low is very useful in keeping the prices low and it will ultimately affect the profits. The cost of warehousing and the capital that gets tied up should be kept low.

Physical Distribution Class 12 concludes that without a proper physical distribution system the firm will not be able to fulfil the demand of all and earn revenue.

BST Chapter 11 – Marketing

1. Marketing Management
2. Marketing Management Philosophies
3. Functions of marketing
4. Marketing mix
5. Products – Classification of Products
6. Branding
7. Packaging – Levels , Functions & Importance
8. Labelling
9. Pricing – Factors affecting Price of a Product or Service
10. Components of Physical Distribution
11. Channels of Distribution
12. Advertising – Benefits, Limitations, Objections
13. Personal selling
14. Sales promotion
15. Publicity – Characteristics and Objectives