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Distribution channels

distribution channels

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Distribution channels

  1. 1. DISTRIBUTION CHANNELS Presented By:- Namrta Singh 1
  2. 2. CONTENTS: Definition Types of channels Marketing Intermediaries Functions of Distribution Channels 2
  3. 3. “A distribution channel is a chain or set of intermediaries through which a good or service passes until it reaches the end customer”. Producer Intermediaries Customer Distribution Channel 3
  4. 4. Types Of Distribution Channels Disrtibution channel Indirect distribution channel Two-level Three-level Direct distribution channel Zero- level 4 One-level Four-level
  5. 5. Direct Distribution Channel:- This type of channel does not have any market intermediaries, the goods go from the producer direct to the customer. This is also known as ‘zero-level’ distribution channel. 5
  6. 6. Indirect Distribution channels:- In this type of channel there are intermediaries and the product directly does not go to the customer. These further can be classified as in the following categories :  One- level Distribution Channel  Two- level Distribution Channel  Three- level Distribution Channel  Four- level Distribution Channel 6
  7. 7. One- level Channel: There is only one intermediary between the producer and consumer. The intermediary can be a retailer or a distributor. Example: tata sells its cars only to its authorized retailers, expensive watche, etc. 7
  8. 8. Two- level Channel: This type of channel has two intermediaries, namely wholesaler/distributor and retailer. Example: FMCG 8
  9. 9. Three- level Channel: This type of channel has three intermediaries,namely, distributor, wholesaler and retailer. Example: sugar 9 Producer Distributor Wholesaler Retailercustomer
  10. 10. Four- level Channel: This type of channel has four intermediaries and is used for consumer durable products also. 10 Producer Agent Distributor WholesalerRetailerCustomer
  11. 11. Market Intermediaries • The people and organizations that assist in the flow of goods and services from producer to customer are known as ‘market intermediaries’. There are some common types of intermediaries:  Middleman  Agent or broker  wholesaler  Retailer  value-added seller  Merchants  Distributor 11
  12. 12. It refers to just about anybody acting as an intermediaries between the producer and the customer. • Intermediaries with legal authority to market goods and services and to perform other functions on behalf of the producer. These are the intermediaries that primarily buy in bulk from the producer and then sell to the retailers and other intermediaries. This is the last link in many distribution channels, retailers sell directly to the final customer. They purchase goods from wholesaler or in some cases directly from the producer. 12 Middleman Agent or Broker Wholesaler Retailers
  13. 13. These intermediaries buy basic product from the producer and value to it or modify it and then resell it to the customer. These are the intermediaries that assume the ownership of the goods they sell to customers and other intermediaries. It is the intermediary that buys goods from the producer and warehouses them and resells them to further intermediaries and customers. 13 Value-added Seller Merchants Distributor
  14. 14. Functions of Distribution Channels 14
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