The nature and functions of distribution
Distribution is efficiently managing the acquicition of raw materials to the factory and the movementof products from the producer or manufacturer to industrial users and consumers. Logistics activities are usually the responsibility of the marketing department and are part of the supply chain.
Ontheir way from producers to end users and consumers, goods and services pass through a series of marketing entities known as a distribution channel.
A distribution channel is made up of marketingintermediaries, or organizaions that assist in moving goods and services from producers to end users and consumers. The following marketing intermediaries most often appear in the distribution channel:* Agents and brokers: agents are sales representatives of facturers and wholesalers and brokers are entities that bring buyers and sellers together. They don’t own or take possesion of goods.
*Industrial distributors: are independent wholesalers that buy related product lines from many manufacturers and sell them to industrial users.
* Wholesalers: firms that sell finished goods toretailers, manufacturers, and institutions.
* Retailers: firms that sell goods to consumers and to industrial users for their own consumption.
* Final consumers: local people.
Multiple channels When aproducer selects two or more channels to distribute the same product to target markets, this arrangement is called dual distribution. Dual channels don’t always work out as planned.
Nontraditionalchannels Often nontraditional channel arrangements help differenciate a firm’s product from the competition such as internet, mail-order channels, or informercials. They can give a producer serving aniche market a way to gain market access and customer attention without having to establish channel intermediaries.
Strategic channel alliances Producers often form strategic channel alliances which...