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Journal of Indian Institute of Management Bangalore

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Distribution Decisions and Consumer Behaviour

Volume 15, Number 3 Article by Sudas Roy September, 2003

Distribution Decisions and Consumer Behaviour :

The customer has rightly become the central focus for designing and implementing all decisions in marketing. Most successful companies have remained close to the customer by developing a very clear understanding of ‘consumer behaviour’ dimensions. Distribution is one of the most critical parts of the marketing-mix strategy and consumer behaviour insights strongly drive the structural and process related decisions in this area. Distribution decisions are basically ‘channel management’ decisions and the service outputs of a distribution channel (namely lot size, waiting time, spatial convenience and variety) need to be structured differently for different target segments based on their pattern of preference. A consumer with limited purchasing power would prefer a smaller lot size of a category/product for which the distribution system will have to create long, third-party based, multi-level channels where successive break-of-bulk operations will take place till at the retail level very small bulks are broken to meet the small lot size demand of the customer.

The customer’s ‘consumer behaviour’ not only covers her orientation to the offering but also extends to her relationship with the stores carrying the offering. Consumer behaviour, attitudes and dispositions impact significantly on the process aspects of the distribution channel, influencing retailing decisions in many significant ways. Further, just as channels of distribution get influenced by consumer behaviour dimensions, the reverse influence also has to be noted.

Reprint No 03306 j