The ways goods are moved from manufactures to consumers already learned in previous lessons. The wholesaler and retailer act as middle men. The distribution is the process of getting goods to the consumers & distribution chain is the stage of process connected to each other, it is made up of; Manufactures, wholesalers, Retailers and consumers.
The manufactures specialized in producing & sets its factory in a location best suited its need. They consider number of factors before setting the location. The factors are; availability of natural resources & workers, transportation access, Electricity and water.
If people who make up the market live all over the country, then manufactures will consider how these goods will reach these potential customers- they concentrate on what they are goods at-making goods. These manufactures rely on other businesses to get goods to consumers.
The local business make arrangement to import the product, if manufactures is in other countries These local business is referred to as distributor. They stored their product in ware house and sell it all over businesses within the country. They don’t want to sell their product directly to consumers.
The local manufactures within country, choose to sell its product to wholesaler. They perform much the same function as distributor. Some wholesaler buy imported goods from distributor. The wholesaler do not sell directly to consumers. They buy goods in bulk from manufactures and distributors. These goods are stored in ware house.
The business that sell directly to consumers are called retailers. They buy goods directly to wholesalers, but in some cases, they buy it from manufactures and distributors. There are situation make up distribution chain;
- One-Step retailing: Manufacturer to Consumers
- Two-Step retailing: Manufacture to Retailer to Consumer
- Three-Step retailing: Manufactures to wholesaler to retailer to consumers
- Four step retailing: Manufactures (stays out of the country) distributors to wholesalers to retailers and consumers.
The four –step retailing occurs when manufacturers are outside the countries. The sole distributors import certain goods within PNG- it means wholesaler have to buy from them. They play important role. It is not easy to arrange for imported goods; they consider currencies, shipping arrangements & insurance.
There are different ways of transporting goods either see, land or air. The cost applied to each transportation according to how fast it will reach consumers depends. The retailers locate close to consumer so it help them to walk, but some takes PMV’s & other transportation means. There are transportation businesses to provide services for various transportation needs for business. The ability of retailers to sell goods largely depends on what transport options available to have goods brought to their store.
In the land, there are different transportation to carry Freight-it is the name given to the cargo carries by truck, ship or plane. The different freight transportations in land; Semi-Trailer carry general cargo, Tankers carries Patrols & Refrigerated trucks carries frozen goods. These trucks are very expensive & owned by companies.
The manufacturers & wholesalers have their trucks too. This is called in house transportation service. The specialized transportation services provided by other transport companies to businesses are called, outsource transportation.
In the in-house transportation, business is in full control & not depend on other transportation service-this is their advantage. Their only disadvantage is, those fleet of vehicles are too expensive to own.
When business owned a number of ships, vehicles and trucks, we referred to as fleet. It is the groups of ships, planes and tucks.
The ship boats and canoes play major roles in distributing goods-either in see or rivers. In PNG, we have, Ramu, Fly and Sepik river. It’s possible for people to hire smaller boats. The transportation hired for specific journey is called carter.The exports & imports are carried in large ships. The sea & river plays major role in transportation service.
The air transport is the fastest & expensive in moving goods in an area where there is no road, sea & river linkage. In urgent, speed is very important to consider to move goods. If goods or defects machines not transported quick, it affects business revenue, so in situation like this, business consider fastest transportation system.
The circumstances determine choice in selecting transportation. some factors include;
- Availability: what means of transport are available? Are there road connecting two place? is there suitable port or airfield?
- Cost: How much will it cost, if there are several option available. Land & sea are cheaper than air transport.
- Speed: The time is important. In urgent situation, the air transport is okay compared to see and land.
- Types of goods: There are perishable goods –goods cannot be preserved for the long time such as meat, fresh fish & vegetables. These goods are transported with refrigerator fleets. None perishable goods– these packed goods like tin fish & rice. It cannot be spoil, it will stored for the long time.These factors need to be consider before choosing most suitable transportation.