Distribution Channel

ManagementBy: Hirendra Jalchhatri

The Distribution Channel

“Marketing channels are the distribution networks through which producers’ products flow to the market.”

- Cundiff, Still & Govani

“Distribution channels are the system of economic institutions through which a producer of goods delivers them into hands of their users.”

- Richard Buskirk

The types of Distribution Channel

Various ways to structure the business marketing channel,

Direct Channels

Indirect Channels

Parts of Distribution Channels

Direct Channels

- The manufacturer must perform all of the marketing functions needed to

make and deliver the product.

Direct Channels

• Direct Saleso Feasible when (1) the customers are large and well

defined,(2) sales involve extensive negotiations with upper management, and (3) selling has to be controlled

• Online Marketingo Can be used by businesses as (1) information

platforms, (2) transaction platforms, and (3) platforms for managing customer relationships.

• Telemarketingo Used for less expensive products.

Indirect channels

Some type of intermediary (dealer or distributor) sells or

handles the products.

Indirect Channels

Indirect distribution is generally found where,

Markets are fragmented and widely dispersed. Low transaction amounts prevail. Buyers typically purchase a number of items, often

different brands, in one transaction.

PARTICIPANTS IN BUSINESS MARKETING CHANNEL (Indirect

Channels parts)

Channel management strategy starts with figuring out the intermediaries that will be used with a focus on:

Distributors

Manufacturers’ representatives

Distributors

Small independent businesses

Serve narrow geographic markets

Small orders, but serve many customers & industries

Manufactures Representatives

This representative has expert knowledge of the product as well as an understanding of the market and customer needs.

They make contact with the customer and write up orders, as well as link the manufacturer with the industrial end user.

Distribution Modes

In Agriculture, Form Of ‘Distribution Channel’

Conclusion

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