Channel of Distribution

Channel of Distribution
A channel of distribution is known as marketing channel. A channel of distribution is the structure of intra-company organisation units and extra- company agents and dealers, wholesale and retail through which a commodity, a product or service is marketed.
Marketing channels are the combination of agencies through which the manufacturer markets the product/service to the ultimate consumer. The intermediaries in the distribution channel are called middlemen, who perform functions required to ensure smooth flow of goods and services from the manufacturing end to the consuming end.
Examples:
(a) Capital Goods; Door-to-Door (Eureka Forbes)
(b) Industrial Goods-Institutional Buyers
(c) Industrial Goods
(d) Durable Goods
(e) Agricultural Goods
(f) Pharma Products/Baby Foods
(g) Pharmaceuticals.

Functions of Marketing Channels:
According to Prof. Kotler, the following functions are proposed:
1. Research: The gathering of information necessary for planning and facilitating exchange.

2. Promotion: The development and dissemination of persuasive communication about the offer.

3. Contact: The searching out and communicating with prospective buyers.

4. Matching: The shaping and filling of the offer to the buyer’s requirements. This includes such activities as manufacturing, grading, assembling and packaging.

5. Negotiating: The attempts to reach final agreement on price and other terms of the offer, so that transfer of ownership or possession can be effected.

6. Physical Distribution: The transporting and storing of goods.

7. Financing: The acquisition and dispersal of funds to cover the costs of the channel work.

8. Risk Taking: The assumption of risks in connection with carrying out channel work.