CHANNEL OF DISTRIBUTION

• CHANNEL OF DISTRIBUTION
  MARKETING
• MEANING OF CHANNELS OF DISTRIBUTION
• A CHANNEL OF DISTRIBUTION IS AN ORGANIZED NET WORK OR A SYSTEM OF AGENCIES AND INSTITUTIONS WHICH IN COMBINATION PERFORM ALL ACTIVITIES REQUIRED TO LINK PRODUCERS WITH USERS AND USERS WITH PRODUCERS TO ACCOMPLISH THE MARKETING TASK.
• PHILLIP KOTLER:- A SET OF INDEPENDENT ORGANIZATION INVOLVED IN THE PROCESS OF MAKING A PRODUCT SERVICE AVAILABLE FOR USE FOR CONSUMPTION
• AMERICAN MARKETING ASSOCIATION
• THE STRUCTURE OF INTRA COMPANY ORGANIZATION UNITS,EXTRA COMPANY AGENTS AND DEALERS,WHOLE SALE AND RETAIL THROUGH WHICH A COMMODITY ,PRODUCT OR SERVICE IS MARKETED
• A CHANNEL OF DISTRIBUTION IS A PATH WAY DIRECTING THE FLOW OF GOODS AND SERVICES FROM PRODUCERS TO CONSUMERS
• ROLE AND FUNCTION OF MARKETING CHANNELS

1. PROVIDE MARKET INFORMATION:-PROVIDE MARKET RELATED INFORMATION AS THEY ARE CONSTANT TOUCH WITH THE CUSTOMERS AND THEY FEEL THE PULSE OF THE MARKET. AND THEY PROVIDE INFORMATION REGARDING MARKET CONDITIONS,CONSUMER PREFERENCE.CHANGING TASTES ETC
2. PROMOTION:-THEY DEVELOP AND SPREAD PERSUASIVE COMMUNICATION ABOUT A PRODUCT TO CONSUMER. MANY RETAILERS ARRANGE WINDOW DISPLAY,DIRECT MAIL AND SALESMAN FOR DEMONSTRATION
3. CONTACTS: CHANNELS HELP BY REDUCING THE NUMBER OF CONTACTS NEEDED FOR REACHING CONSUMERS
4. BREAKING BULK”: MANUFACTURER PRODUCE AND SUPPLY MANY PRODUCTS IN BULK AND MEET THE SMALL SIZE NEEDS OF THE CONSUMERS BY  BREAKING THE BULK
5. CONSUMERS NEED AN ASSORTMENT OF VARIOUS PRODUCT FROM VARIOUS COMPANIES. CHANNEL DO THE JOB OF COMBINING PRODUCTS MANUFACTURED BY DIFFERENT MANUFACTURER AND OFFER THEM IN ASSORTMENT THAT ARE CONVENIENT TO CONSUMERS.
6. PRICE NEGOTIATION:-CONDUCT PRICE NEGOTIATION WITH BUYERS ON BEHALF OF THE MANUFACTURER AND ASSISTS IN REACHING AN AGREEMENT ON PRICE AND OTHER TERMS OF THE OFFER
7. PHYSICAL DISTRIBUTION:-FUNCTION LIKE TRANSPORTATION,HANDLING WAREHOUSE,SUB DISTRIBUTION,ORDER PROCESSING AND INVENTORY MGMT ARE CARRIED BY THE CHANNEL
8. RISK TAKING:-ABSORB THE RISK OF FAILURE TO SELL THE GOODS,PRODUCT OUTDATEDNESS OR CHANGES IN THE PRICES OF GOODS

9. FINANCING:CHANNELS HELP BY EXTENDING CREDIT TO CUSTOMERS AND ENSURING SALES AND ALSO BY MAINTAINING INVENTORY OF PRODUCT FOR MANUFACTURER THEY REDUCE THEIR WORKING CAPITAL REQUIREMENT.
10. PROMOTE PRODUCTS TO POTENTIAL CUSTOMERS
11. HANDLES AND TAKE CARE OF ALL THE FLOWS INVOLVED IN DISTRIBUTION:

1. PHYSICAL FLOW OF THE PRODUCTS
2. OWNERSHIP FLOW
3. RISK FLOW
4. NEGOTIATION FLOW
5. FINANCING FLOW
6. INFORMATION FLOW
7. PROMOTION FLOW

• CLASSIFICATION OF CHANNEL

1. CONVENTIONAL CHANNEL:

1. DIRECT CHANNEL: WHERE THE GOODS AND SERVICES ARE SOLD DIRECTLY TO CONSUMER WITHOUT INVOLVING INTERMEDIARY
2. INDIRECT CHANNEL:WHICH EMPLOYS THE SERVICES OF INTERMEDIARY

2. INTEGRATED CHANNEL

• CONVENTIONAL CHANNEL

1. MANUFACTURER TO CONSUMER
2. MANUFACTURER TO RETAILER AND TO CONSUMER
3. MANUFACTURER TO WHOLESALER TO RETAILER TO CONSUMER
4. MANUFACTURER TO WHOLESALER TO CONSUMER
5. MANUFACTURER TO AGENT TO WHOLE SALER TO RETAILER TO CONSUMER

• INTEGRATED CHANNEL
• THOSE NETWORK THAT WORK WITH FULL COORDINATION RATHER WORKING IN LOOSE MANNER
• VERTICAL CHANNEL:-PROFESSIONALLY MANAGED AND CENTRALLY PROGRAMMED NETWORK THAT ARE PR EENGINEERED TO ACHIEVE OPERATING ECONOMIES AND MAXIMUM MARKET IMPACT.

1. ADMINISTERED USE OF PROGRAMMES DEVELOPED BY ONE OR LIMITED NUMBER OF FIRMS
2. CONTRACTUAL: OUTSIDE UNITS  WOULD DO FOR PRICE
3. CORPORATE:-CHANNEL COMPONENT OWNED AND OPERATED BY SAME ORGANIZATION

• HORIZONTAL CHANNEL: IN WHICH TWO OR MORE COMPANIES JOIN THEIR HANDS TO EXPLOIT A MARKETING OPPORTUNITY EITHER BY THEMELVES OR AN INDEPENDENT UNIT