What are various types of channels of distributions?
What are various types of channels of distributions?
Or
Describe in brief the main types of channels of distribution.
Ans.
Depending upon the products nature the channels of distributions can be classified in two categories:
A. Channels related to consumer goods
B. Channels related to industrial goods
(A) Channels of Distribution Related to Consumer Goods:
The producers of consumer goods may select one of the following kinds of channels for distribution of their goods:
1. When the producer wants to make use of a long medium for making his goods available to the consumers he hands over the goods to sole selling agent who sends it to wholesaler and then the wholesaler sells the goods to the retailers. The retailer being the last medium in distribution line sells the goods to the consumer. This kind of distribution is mainly popular in India.
2. When the producer wants to make use of not much longer medium, he first sells the goods to wholesaler and then the wholesaler sells them to retailer and he then sells them to consumer. This is an old and traditional way of distribution. This method is most suitable for small scale manufacturers. This method is generally used in sale of agricultural goods.
3. When the manufacturer desires to make his goods available to consumer fast, he sells the goods directly to retailer and he sells them to consumer. This method is applied by firms like Raymonds and O.C.M.
4. When the producer wants to sell the goods directly to consumer, he uses the direct distribution method. For this purpose following outlets are used.
1. Own shops 2. Own salesmen 3. By mail 4. Tele orders 5.Through machines.
5. When the producer uses a single medium for distribution, he sells goods to his agent representative and he sells them to consumer directly. The representive agent performs all such functions which a retailer is supposed to do.
6. Those producers who want to keep their distribution cost low, they sell their goods to their agent who sells them to retailer and he then sells them to consumer.
B. Channels of Distributions Related to Industrial Goods:
Following methods are available for distribution of Industrial goods:
1. The producer after manufacturing the goods sends them to his agent who sells them to wholesale and finally the wholesaler sells the goods to industrial buyer. This is the most popular method of direct distribution. In this method the manufacturer does not have to indulge in sales activities for selling of his products.
2. When the manufacturer produces industrial goods of small nature, he first sells them to wholesaler who sells to industrial buyer.
3. When the manufacturer adopts direct distribution system he arranges to send the goods directly to the industrial buyer in this system. This method is used for sale of heavy engines, heavy machinery, electrical equipments etc.
