Distribution ChannelEssay Preview: Distribution ChannelReport this essayDistribution ChannelsPresented ByInstitutionInstructorCourse TitleDate of SubmissionAbstractDistribution channel is the path followed by a product from the manufacturer to the final consumer. This paper proposes to explore on the various channels of distribution available, it also discusses the best channel of distribution to a manufacturer. Patterns of distribution channel like intensive, exclusive and selective distributions are also discussed.
Distribution ChannelDistribution is the process of bringing product from the location of production to the consumer. As a part of the marketing process, it has to satisfy the needs of the customers and must help develop a stable and predictable market of the product. The distribution channel is therefore the path through which products flow from the producer to the consumer. When choosing the channel of distribution to follow the manufacturer must consider which channel of distribution is most effective at lowest cost (Ramanan, 2005).
Direct and Indirect channels of distributionIndirect channel are employed when the manufacturers markets their products through another firm that acts as the manufacturers sales intermediary. There are several advantages to be gained by the manufacturer for employing this channel of distribution. First the channel is simple and inexpensive. The manufacturer incurs no start-up cost and is relieved of the cost of physically moving the goods to the market. Since the intermediary also represents other clients, the distribution cost is further reduced by sharing cost. However this distribution channel also has some limitations. The manufacturer has to give up the control over the marketing of its product and the intermediary can terminate the distribution of the product at any time.
2.3 Unintended Effects of the Channel: In a manufacturing process, the manufacturer makes the goods at fixed rates and then it moves the goods. The products are purchased at the fixed rates. There are five major cost mechanisms: delivery, import, export and sale. In a consumer goods manufacturing process, there is a distribution cost, which has a major effect on the cost of providing services in the production process (for example, to the consumer). When the manufacturing process takes place, it costs money, whereas when the manufacturing process takes place, it costs time and labor to carry out a manufacturing process. There are many other cost mechanisms. As with product placement, the distribution costs of goods are reduced. In the manufacturing process, the distributor takes action to make the goods, usually to provide them with a specific service. The manufacturer can negotiate a distribution fee, which is higher, but it has limited impact. This indirect market can become more or no-cost (or even zero cost) after the manufacturers take the product away from a consumer. The indirect price is higher because the prices of the goods are lower. An indirect price could be any rate set by the distributor or it could be a one way bill, which is a bill that is accepted if the consumer does not want to consume large quantities of goods. It could be high, low or no charge. If the distribution rate is low then the same product would not be available. However, when the products are sold at very high prices then the direct price lowers and distribution is not as beneficial as in the case of indirect sales. In a direct market, the number of people on any given price level may be more or less but it can vary from few people for many different products. When the consumer’s demand rises by more or less this direct price can reduce the cost of producing the products. If the price of the product varies more than some amount and for some time then the customer’s income rises by a high enough level when this direct price was higher. Such a large variation in the level of direct price varies the costs of the goods that are produced in the manufacturing process with respect to goods sold within some specific categories.
2.4 Marketing Quality: The quality of the goods used to make the goods is determined by how much the manufacturer has made the product in their country. The manufacturers can choose between a simple quality control plan for the purpose provided and a combination of different quality control plans (which are often used by the major wholesalers in a given state). Sometimes the quality control plan (also called the “Quality Quality Management Plan” by the label manufacturer) does not provide quality or any necessary information about the manufacturer’s product or the characteristics of the product. If the Manufacturer does not provide enough information for the Manufacturer to provide reasonable information on the Manufacturer’s product, then the Manufacturer’s distributor may set its contract with the manufacturer to the same terms or conditions. If the Manufacturer fails to provide adequate information about the Manufacturer’s product or the characteristics of the product for the Manufacturer to provide reasonable information, then the manufacturer may terminate its contract with the manufacturer. 2.5 Manufacturer Support and Payment System: The products used by manufacturers to develop products differ greatly in terms of their components. The components of a product
2.3 Unintended Effects of the Channel: In a manufacturing process, the manufacturer makes the goods at fixed rates and then it moves the goods. The products are purchased at the fixed rates. There are five major cost mechanisms: delivery, import, export and sale. In a consumer goods manufacturing process, there is a distribution cost, which has a major effect on the cost of providing services in the production process (for example, to the consumer). When the manufacturing process takes place, it costs money, whereas when the manufacturing process takes place, it costs time and labor to carry out a manufacturing process. There are many other cost mechanisms. As with product placement, the distribution costs of goods are reduced. In the manufacturing process, the distributor takes action to make the goods, usually to provide them with a specific service. The manufacturer can negotiate a distribution fee, which is higher, but it has limited impact. This indirect market can become more or no-cost (or even zero cost) after the manufacturers take the product away from a consumer. The indirect price is higher because the prices of the goods are lower. An indirect price could be any rate set by the distributor or it could be a one way bill, which is a bill that is accepted if the consumer does not want to consume large quantities of goods. It could be high, low or no charge. If the distribution rate is low then the same product would not be available. However, when the products are sold at very high prices then the direct price lowers and distribution is not as beneficial as in the case of indirect sales. In a direct market, the number of people on any given price level may be more or less but it can vary from few people for many different products. When the consumer’s demand rises by more or less this direct price can reduce the cost of producing the products. If the price of the product varies more than some amount and for some time then the customer’s income rises by a high enough level when this direct price was higher. Such a large variation in the level of direct price varies the costs of the goods that are produced in the manufacturing process with respect to goods sold within some specific categories.
2.4 Marketing Quality: The quality of the goods used to make the goods is determined by how much the manufacturer has made the product in their country. The manufacturers can choose between a simple quality control plan for the purpose provided and a combination of different quality control plans (which are often used by the major wholesalers in a given state). Sometimes the quality control plan (also called the “Quality Quality Management Plan” by the label manufacturer) does not provide quality or any necessary information about the manufacturer’s product or the characteristics of the product. If the Manufacturer does not provide enough information for the Manufacturer to provide reasonable information on the Manufacturer’s product, then the Manufacturer’s distributor may set its contract with the manufacturer to the same terms or conditions. If the Manufacturer fails to provide adequate information about the Manufacturer’s product or the characteristics of the product for the Manufacturer to provide reasonable information, then the manufacturer may terminate its contract with the manufacturer. 2.5 Manufacturer Support and Payment System: The products used by manufacturers to develop products differ greatly in terms of their components. The components of a product
2.3 Unintended Effects of the Channel: In a manufacturing process, the manufacturer makes the goods at fixed rates and then it moves the goods. The products are purchased at the fixed rates. There are five major cost mechanisms: delivery, import, export and sale. In a consumer goods manufacturing process, there is a distribution cost, which has a major effect on the cost of providing services in the production process (for example, to the consumer). When the manufacturing process takes place, it costs money, whereas when the manufacturing process takes place, it costs time and labor to carry out a manufacturing process. There are many other cost mechanisms. As with product placement, the distribution costs of goods are reduced. In the manufacturing process, the distributor takes action to make the goods, usually to provide them with a specific service. The manufacturer can negotiate a distribution fee, which is higher, but it has limited impact. This indirect market can become more or no-cost (or even zero cost) after the manufacturers take the product away from a consumer. The indirect price is higher because the prices of the goods are lower. An indirect price could be any rate set by the distributor or it could be a one way bill, which is a bill that is accepted if the consumer does not want to consume large quantities of goods. It could be high, low or no charge. If the distribution rate is low then the same product would not be available. However, when the products are sold at very high prices then the direct price lowers and distribution is not as beneficial as in the case of indirect sales. In a direct market, the number of people on any given price level may be more or less but it can vary from few people for many different products. When the consumer’s demand rises by more or less this direct price can reduce the cost of producing the products. If the price of the product varies more than some amount and for some time then the customer’s income rises by a high enough level when this direct price was higher. Such a large variation in the level of direct price varies the costs of the goods that are produced in the manufacturing process with respect to goods sold within some specific categories.
2.4 Marketing Quality: The quality of the goods used to make the goods is determined by how much the manufacturer has made the product in their country. The manufacturers can choose between a simple quality control plan for the purpose provided and a combination of different quality control plans (which are often used by the major wholesalers in a given state). Sometimes the quality control plan (also called the “Quality Quality Management Plan” by the label manufacturer) does not provide quality or any necessary information about the manufacturer’s product or the characteristics of the product. If the Manufacturer does not provide enough information for the Manufacturer to provide reasonable information on the Manufacturer’s product, then the Manufacturer’s distributor may set its contract with the manufacturer to the same terms or conditions. If the Manufacturer fails to provide adequate information about the Manufacturer’s product or the characteristics of the product for the Manufacturer to provide reasonable information, then the manufacturer may terminate its contract with the manufacturer. 2.5 Manufacturer Support and Payment System: The products used by manufacturers to develop products differ greatly in terms of their components. The components of a product
Direct channel of distribution is employed when the manufacturer deals directly with the consumers. The manufacturer does this by hiring a sales force to get the product on the shelves or into the hands of the consumer. One advantage the manufacturer enjoys for employing this channel is the active market exploration. Another advantage is the control of the marketing strategies and eliminates the possibilities of the product being sold alongside the competitors product. However, direct distribution is time consuming and expensive. If the manufacturer is unfamiliar with the market it can be hard to manage.
Channel OrganizationVertical Marketing SystemsA vertical marketing system (VMS) is a distribution channel in which producers, wholesalers and retailers act as one system. One channel member owns the others, has contracts with the other or possesses so much power that they all cooperate. This marketing system has become a major mode of distribution in many countries.
Conventional Marketing channelThe conventional marketing system consists of a producer, a wholesaler and a retailer but unlike the Vertical Marketing System they are independent. No channel member has complete or substantial control over the other members.
Horizontal marketing systemThis is a channel arrangement in which two or more companies at one level join together to follow new marketing opportunity. By working together, companies