Marketing:Channels of Distribution/ Distribution channels
Channels of Distribution"All the organisations through which a productmust pass between its point of production andconsumption"Producers Intermediaries Customer
Channels of Distribution…create time, place, possession andinformation utilities. PLACE TIME POSSESSIO N Information 37 2157 9 24 1 Creating utilities for customers.
Importance of ChannelsProvide distribution efficiencyProvide salesmanshipHelp in price mechanismLook after a part of physical distribution &financingAssist in merchandisingProvide market intelligenceAct as change agents & generate demandTake care of the flows involved indistribution
Functions of distribution channelsFacilitate selling by being physically close tocustomersProvide distributional efficiency by bridging themanufacturer with the user, efficiently &economicallyBreak the bulk & cater to the tiny requirementsof buyersAssemble products into assortments to meetbuyers need; match ‘segments of supply with‘segments of demand’Look after a part of physical distribution/marketing logistics
Functions of distribution channels (contd) Sub-distribution1. Reselling2. Retransport3. Handling4. Accounting Stock holding1. Providing warehouse space2. Storing the stocks3. Bearing risks4. Transforming static stocks into operational stocks, thereby aiding the sales process
Functions of distribution channels (contdShare the financial burden of the principalProvide salesmanshipProvide pre-sale & after sale serviceAssist in sales promotionAssist in merchandisingAssist in introducing new productsAssist in implementing the price mechanismAssist in developing sales forecastProvide market intelligence & feedbackTake care of liaison requirementsHelp diffuse innovations among consumers
Factors affecting the choice of distribution channelEffective coverage of the target marketEfficient cost-effective distributionEnsuring that consumers incur minimum exertionin procuring the productHelping the firm to carry on manufacturinguninterrupted, confident that the channels willtake care of sales.Partnering the firm in financing & sub-distributiontasks.
Types of Marketing Intermediaries Manufacturer Wholesaler Retailer Consumer