Channels of distribution refer to all organizations involved in moving a product from production to consumption. They create time, place, possession, and information utilities for customers. The key functions of distribution channels are to facilitate selling, provide distribution efficiency, and break bulk. Factors affecting the choice of distribution channel include effective market coverage, cost efficiency, minimizing customer exertion, and partnering with the firm on tasks like financing and sub-distribution. Common types of marketing intermediaries are manufacturers, wholesalers, retailers, and consumers.

1. Marketing:
Channels of Distribution/
Distribution channels

2. Channels of Distribution
"All the organisations through which a product
must pass between its point of production and
consumption"
Producers Intermediaries Customer

3. Channels of Distribution
…create time, place, possession and
information utilities.
PLACE
TIME
POSSESSIO
N
Information
37 2157
9 24 1
Creating utilities for customers.

4. Importance of Channels
Provide distribution efficiency
Provide salesmanship
Help in price mechanism
Look after a part of physical distribution &
financing
Assist in merchandising
Provide market intelligence
Act as change agents & generate demand
Take care of the flows involved in
distribution

5. Functions of distribution
channels
Facilitate selling by being physically close to
customers
Provide distributional efficiency by bridging the
manufacturer with the user, efficiently &
economically
Break the bulk & cater to the tiny requirements
of buyers
Assemble products into assortments to meet
buyers need; match ‘segments of supply' with
‘segments of demand’
Look after a part of physical distribution/
marketing logistics

6. Functions of distribution
channels (contd)
Sub-distribution
1. Reselling
2. Retransport
3. Handling
4. Accounting
Stock holding
1. Providing warehouse space
2. Storing the stocks
3. Bearing risks
4. Transforming static stocks into operational
stocks, thereby aiding the sales process

7. Functions of distribution
channels (contd
Share the financial burden of the principal
Provide salesmanship
Provide pre-sale & after sale service
Assist in sales promotion
Assist in merchandising
Assist in introducing new products
Assist in implementing the price mechanism
Assist in developing sales forecast
Provide market intelligence & feedback
Take care of liaison requirements
Help diffuse innovations among consumers

8. Factors affecting the choice of
distribution channel
Effective coverage of the target market
Efficient cost-effective distribution
Ensuring that consumers incur minimum exertion
in procuring the product
Helping the firm to carry on manufacturing
uninterrupted, confident that the channels will
take care of sales.
Partnering the firm in financing & sub-distribution
tasks.

9. Types of Marketing
Intermediaries
Manufacturer
Wholesaler
Retailer
Consumer

10. Types of Marketing
Intermediaries
Sole- selling agent/ marketer
Carrying & forwarding agents
Wholesaler/ stockist/ distributor
Semi-wholesaler
Retailer/ Dealer