The aim of this paper is to improve the process of physical distribution of consumer goods in the Western Balkans region through defining and analyzing key indicators of physical distribution. Theoretical research identified the most important indicators that affect physical distribution, such as: transport costs, quality of delivery, condition of vehicles, customer relations, and institutional/regulatory factors. The empirical study was conducted on a sample of 166 respondents in the distribution centers and transport companies and 146 end customers. Multiple regression analysis defined the individual contribution of each of these indicators to the process of physical distribution of goods. A comparison of results between the Western Balkan countries that are EU member states and those that are non-EU countries showed statistically significant differences in the impact of these indicators. Based on the obtained results, a model of physical distribution of consumer goods was presented. The results show to managements of distribution centers and transport companies which indicators should be developed to ensure timely and complete delivery of goods according to the 7P concept and thereby create a base of satisfied and loyal end users of transport services. Recommendations for future research are provided in the paper.
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