Cutting costs of distribution

We have already seen that distribution costs are high, that it often costs as much to get things into people's hands as to make the things in the first place. Marketing management faces the responsibility of doing everything possible to reduce the cost of distribution.
But cutting the cost of distribution is not merely a matter of ordering it done, or of assigning the task to the cost-accounting department. To cut costs effectively, marketing must organize for cost-cutting. This means it must assign direct responsibility for the job to the chief marketing executive. This is being done in a growing number of businesses.
The control or reduction of the costs of distribution is properly an integrated top staff assignment. This becomes apparent when we consider the various approaches to cost-cutting, and the various facets of the problem involved:
(a)    Sales policies must be reviewed: terms, prices, channels, service.
(b)    Manpower allocation and efficiency must be examined: where do these people come from? What do they do? How do we recruit better people? How do we train them? How do we compensate and motivate them?
(c)    Dealer relations must be reexamined, and changed where needed.
(d)    The organization structure must be reexamined and changed if necessary: size, activities, supervision, relationships, etc.
(e)    The advertising and promotion program must be scrutinized: how effective is it? big enough? too big? how can we improve it?
(f)    The product mix needs examining: How well does it meet customers' needs?

(g)    Warehousing and inventory policies need reexamining. Production and sales have to be coordinated. Out-of-stock sales are costly, sometimes fatal. Balanced inventories call for close production-sales scheduling.
(h)    Research and forecasting must be improved if they are to make their full contribution to efficient distribution.
While marketing naturally does not hold sole responsibility in all these areas, it does hold primary responsibility. The successful job of controlling the cost of distribution is a total company effort, requiring data from accounting, as well as from marketing, and requiring careful and sound interpretation on the part of management.