This document discusses marketing channels and types of distribution channels. It defines a marketing channel as the structure used to market a product from producers to consumers, including internal company units and external agents. The objectives of channels are to bridge producers and consumers, transfer title to goods, physically move and store goods, and communicate product information. Common conventional channels discussed are direct selling, manufacturer to retailer to consumer, manufacturer to wholesaler to retailer to consumer, and manufacturer to agent to retailer to consumer. The longest channel involves an agent and wholesaler. The document notes factors that influence channel choice like market type, product attributes, availability of middlemen, company capabilities, and customer and environmental considerations.

4. “ A channel of distribution or marketing channel is
the structure of intra company organization units
and extra company agents & dealers, wholesale
and retail through which a commodity, product or
service is marketed”
-American Marketing Association

5. Objectives
• To bridge the gap between the producers and
consumers
• The transfer of title to goods involved in
marketing process
• Physical movement of goods from point of
production to point of consumption
• Storage of goods
• Communicating the information regarding the
availability, characteristics and price of the
goods

7. Types of channels of distribution
•Conventional channels
•Non-conventional channels

9. Manufacturer-consumer (Direct selling):
• Shortest and simplest channel
• No middleman between the producer and
consumer
• Producers sell directly to customers through door-
to-door salesmen , direct mail , own retail stores,
e.g.. BATA India Ltd.
• Very fast and economical
• Expert services of middlemen are not available
• Large investment is required

10. Direct selling
Manufacturer
consumer

11. Manufacturer-retailer-consumer:
• Manufacturer sells to one or more retailers who
sell to consumers
• This channel is popular when retailers are big
and buy in large quantities ,e.g. departmental
stores , super markets.
• Generally used for distribution of consumer
durables and products of high value like
automobiles, home appliances, etc.
• Relieves manufacturer of the burden of selling
and provides control over distribution

12. One level
Manufacturer
consumer
Channel
Retailer

13. Manufacturer-wholesaler-retailer-
consumer:
• Traditional or normal channel
• Suitable where producers have limited finance and
narrow product line
• Channel used in case of consumer durables which
are not subject to frequent changes in fashion.

14. Two level
Manufacturer
consumer
Channel
Retailer
Whole seller

15. Manufacturer-agent-retailer-consumer:
• Used when retailers are few or geographically
concentrated
• Commonly used to sell agricultural products,
machinery and equipment, etc.

16. Two level
Manufacturer
consumer
Channel
Retailer
Agent

17. Manufacturer-agent-wholesaler-
retailer-consumer:
• Longest channel
• Producer hands over entire output to the agent
who sales them to wholesalers
• In case of cloth this channel is widely used
• Results in wider distribution of products

18. Three level
Manufacturer
consumer
Channel
Retailer
Agent
Whole seller

20. Choice of Channels: Market
Type
of
Market
Geographic
concentration
Number of
potential
customers
Order
size
Customer
buying habit

21. Choice of Channels: Product
Unit
Value
Technical
Nature
Perishability

22. Choice of Channels: Middleman
Services provided by
middlemen
Services provided by
middlemen
Availability of desired
middlemen
Availability of desired
middlemen
Producer’s and
middlemen’s policies
Producer’s and
middlemen’s policies

23. Choice of Channels: Company
Desire
for channel control
Services provided
by seller
Ability
of management
Financial resources

24. Choice of Channels: CUSTOMER
Choice of Channels: ENVIRONMENT