Physical distribution is the group of activities connected with the supply of finished product from the manufacture line to the customers. It includes all the activities related with the supply of finished product at each step, from the manufacture line to the customers. It is the fourth significant component of marketing mix is the physical distribution of products and services.
It is concerned with making the goods and services obtainable at the correct place, so that people can acquire the same. There are two significant decisions relating to this aspect—one regarding physical movement of goods from producers to consumers or users and two, regarding the channels or using intermediaries in the distribution procedure.
Functions of Physical Distribution
The key functions within the physical distribution system are:
- Customer service
- Order processing
- Inventory control
- Transportation and logistics
- Packaging and materials