Channels of Distribution
Channels of Distribution
Channels of Distribution
wholesaler wholesaler
jobber
retailer
retailer
retailer
consumer consumer
consumer consumer
intermediaries
Intermediaries are the middlemen
and signify those individuals in the
channels that either take title to take
goods and sell at profit.
They are directly involved in process
of flow of goods from manufacturer
to consumer.
Types of intermediaries
1. Merchant middlemen
i. Wholesalers
ii. Retailers
2. Agents
i. Brokers
ii. Commission agents
iii. Selling agents
iv. Factors
v. Clearing agents
vi. auctioneer
wholesalers
Functions of wholesalers:
1) Assembling and buying.
2) Warehousing.
3) Transporting.
4) Financing.
5) Risk bearing.
6) Grading, packing and packaging.
7) Dispersing and selling.
8) Providing market information.
Services of wholesalers
1.Service to manufacturers-
Economies of scale.
Saving in time and trouble.
Better use of capital.
Price stabilization.
2. Services to retailers-
i. Saving in cost and time.
ii. Economy in transport an packing.
iii. Better use of limited factors.
iv. Expert knowledge.
Types of wholesalers
Fullfunction
Converter
Drop shipper
retailers
Retailing includes all activities directly
related to the sale of goods and
services to the ultimate consumer for
personal or non-personal use.
functions
1. Buying and assembling.
2. Warehousing.
3. Selling.
4. Grading and packing.
5. Financing.
6. Advertising.
Services of retailer
To manufacturer and wholesaler
1. Offer opportunity.
2. A big relief.
3. Provision of information.
4. Reduce the risk of loss.
To the consumers
1. Largest choice.
2. Relief from storage.
3. Extra service.
4. Supply of information.
Agent middlemen
Agent middlemen are those channel
components who help in the transfer of
goods from the hands of ultimate users
without acquiring the ownership of these
goods.
They operate for a commission.
Types of middle agents
1. Commission agents.
2. Brokers.
3. Factors.
4. Auctioneers.
5. Selling agents.
6. Clearing agents.
Factors governing the choice of
channel of distribution
FACTORS
Environmental factors
PRODUCT FACTORS
1. Product nature.
2. Technical nature: simple or
complex.
3. The length of product line.
4. The market position: market
position of manufacturer.
The market forces-
1. The existing market structure.
2. The nature of purchase
deliberations.
3. Availability channel.
4. competitior's channels.
Institutional factors
1. The financial ability of channel
members.
2. The promotional ability of channel
members.
3. The post-sale service ability.
Unit factors
1. The company’s financial position.
2. The extent of market control
desired.
3. The company reputation.
4. The company marketing policies.
Factors governing the choice of
intermediary
1. Economic factors
2. The legal restrictions.
3. Fiscal policies.
4. The financial position.
5. The facilities available.
Thank you
A presentation by-
Raveena kaushal
Bba 3rd sem
Soms bhaddal