Important Information About Distribution Channels

Important Information About Distribution Channels

Distribution channels are the means by which products are handed from the manufacturer to the receiver. From the point of production, the products reach the buyer through various hands. Distribution channels are means of communication between the producers and the producers to reach the buyer. The distribution channels are very important for the products to be found in the right place and time, at the desired amount. Distribution channels are also required to maintain customer satisfaction.
Distribution channel units; manufacturer, wholesaler, retailer, consumer.
In some distribution channels, the product reaches the consumer directly from the manufacturer. Sometimes wholesalers, retailers or brokers enter the producers and consumers. These are called vehicles. Each vehicle undertakes certain responsibilities.
Wholesalers purchase the product from the manufacturer and sell it to other wholesalers, retailers or industrial consumers.
Distribution Channel Types:
Depending on the situation, various distribution channels can be developed.
1-Consumer Goods Distribution Channels:
A Channel: Manufacturer-Consumer
B-channel: Manufacturer-Retailer-Consumer
C Channel: Manufacturer-Wholesaler-Retailer-Consumer
D Channel: Manufacturer-Broker-Wholesaler-Retailer-Consumer
Retailers offer retailers a distribution solution by selling more products to retailers, establishing relationships with a small number of retailers instead of a large number of consumers.
C channel is preferred when thousands of retailers are needed. The manufacturer relies on a small number of wholesalers rather than a large number of retailers. Wholesalers buy large quantities of products from producers, divide them into small quantities and sell them to retailers.
The D channel is preferred for places and conditions where the manufacturer does not see work and for products requiring heavy distribution. Commissioners do not buy products from producers, they direct producers to wholesalers.
2- Industrial Property Distribution Channels:
E Channel: Manufacturer-Industrial Consumer
F Channel: Manufacturer – Industrial Distributor – Industrial Consumer
G-Channel: Manufacturer-Broker-Industrial Consumer
H Channel: Manufacturer-Broker-Industrial Distributor-Industrial Consumer
E-channel, high-cost industrial products are especially preferred for most industrial products.
Industrial distributors sell standard industrial products. Such as production, maintenance-repair tools … They offer many opportunities for producers. They apply local market activities at low cost. Because of their proximity to customers, they determine their local market needs and transfer them to the producers. By holding stocks in their hands, they reduce the capital requirements of producers. There are also disadvantages depending on location. By keeping the costly products at stake, they can offer substitute products and prolong the stay time of the products. Technical information may be missing.

G channel is preferred for complementary products produced by a large number of producers in certain locations. The commissioner possesses technical knowledge, market knowledge and customer portfolio. There is no need to allocate resources for marketing out of season in the marketing of seasonal products.
H channel, the sources of the manufacturer are preferred when it is not enough to reach a large target audience. Especially when the manufacturer wants to open up to new markets with the same source.
A large number of distribution channels can be implemented to achieve various target masses. It is also applied to more than one distribution channel for the same product and target group.
Distribution Channel Election Decisions:
Distribution channel selection decisions are based on business objectives and alternative channel benefits. The vehicles to be worked on and the regions where they will be located are identified. The following factors influence the distribution channel choice as business objectives are determined by target group.
*Product features
* Channels for reaching the target products
* Competition in the target segment
* The financial strength of the operator, target groups, property mix, channel experience and relationships
Environmental factors.
When making decisions on distribution channels, the distribution channels that will provide the most return are determined. The cheapest distribution channel is preferred for the planned production quantity and price for profit maximization.
Distribution Policies:
The producers decide on the number of vehicles at each level after the selection of the distribution channel.
1-Intensive Distribution: All sales points are used for product distribution.
2-Limited or Monopolistic Deployment: Certain sales points are used for product distribution.
3-Selective Delivery: Some available sales points are used for product delivery.
Physical Distribution:
Physical management is the responsibility of the management to develop product movements, material handling and distribution systems. It covers transportation, warehousing, material management, packaging, stock control, production and storage location selection, order management, market determination and consumer services. In physical distribution, communication and cooperation play a key role in business activities.
Physical distribution deals with cost minimization in distribution. Establishes links between locations. The physical delivery process begins with order receipt. After ordering, the relevant market is re-examined.

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