Distribution is an activity that involves making the flow of goods and services from the point of manufacture to end-users or consumers. And 'the means or process in which goods and services moves from point of manufacture to point of consumption. The main distribution importance is to help overcome the difference in time and place that separate goods and services from those who need them.
distribution channel is the means by which goods and services are made available to consumers in the market. It is an organized system of agencies and institutions, which in combination performs all the tasks needed to link producers with consumers, in order to achieve the desired marketing task.
TYPES OF distribution channel
There are two main types of system of channels which are;
1) Conventional Marketing System - This consists of a manufacturer, wholesaler and independent retailer. Each is a separate business entity that seeks to maximize its own profits. And 'more or less a highly fragmented network in which freely aligned manufacturers, wholesalers and retailers have bargained and negotiated conditions of sale of
2) Marketing vertical system - This is a type of distribution channel in which coordination is achieved because the manufacturer, wholesaler and retailer act as a unified system. Anyone member owns the others, and no individual member can dominate the system. It 'also effective in controlling the behavior of the channel and eliminating conflicts that arise when the independent channel members pursue their own goals.
CHANNEL DISTRIBUTION FORMS
In both of the above types mentioned above can take any of these forms.
There are three forms of distribution channel they are;
I. direct channel - This is when the producers decide to sell directly to consumers. This is mostly common in industrial and sale of perishable consumer goods. It is a zero-level method. That is, producer - consumer. This form is mainly based on services. For example Haidresser, doctor etc. There is no intervention of intermediaries in this form of distribution channel.
II. indirect channel - This involves the intervention of intermediaries to make the movement of goods to final consumers. It is a method of a level. Ie, Manufacturers - Retailers - Consumer.
III. Multi-Channel - This is using one or more channels of the system to reach the market. It is a method in two levels. Ie, manufacturer - wholesaler - retailer - consumer.
Factors influencing the choice of distribution channel
The choice of the channel is based on the analysis of the consumer, the type of enterprise, product characteristics, and consideration of the environment of the company .
1. Consideration of the market: it is following analysis should be done at market level:
I. consumer or industrial market
II. Number of potential consumers
III. geographic market concentration
IV. order size
2. The examination of the product: in-depth analysis of product characteristics should be done as this influences the choice of the channel . These include:
Unit Volume I.
II. Bulk and weights
III. Perish ability
IV. Extension of the product line
3. Consideration company: Company's reputation, resources, experience and desire for control of the canal are important factors that can influence the selection of the channel. For example, businesses with adequate financial and non-financial resources will be less forced to use intermediaries.
4. The consideration intermediaries: Based on this, we consider the type of service rendered by intermediaries, availability of desired intermediaries, and opportunities for sales volume.
5. Environmental Examination: environmental factors to consider include the economy, technology, legal, competition etc. In most cases, when economic conditions are depressed, manufacturers are turning to shorter channel and more convenient.
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