Definition of distributation channel

According to committee of
definition of the American
marketing association a
channel of distribution or
marketing channel is the
structure of intra company
organisation units and extra
company agents and dealers
,wholesale and retail through
which a commodity, product or
 R.S Davar observes, distribution is an
operation ,or a series of operations which
physically brings goods manufactured or
produced by any particular manufacturer
into the hands of the final consumer or
user.
In fact channels of distributation are like
pipelines which take the right quantities
of the right product to the right location
where the target consumers want them
at the right time.
 Classification of distributation
channel
In view of the no of intermediaries
,distributation channel can be classified into 3
categories.
Zero level channel-when the distribution of
product is direct from the producer to the
consumer or user. This is also called direct
selling.
One level channel-when the product is not sent
direct from the producer to the consumer but
the producer sells the product to the retailer
who, in turn,sells to the consumer. This channel
is also known as distribution through retailers.
 Two level channel-when there
are two levels of different kinds
of intermediaries between the
producer and consumers . in
other words, under this
channel ,the manufacturer sells
the product to the wholesaler
who sales the retailer and who
finally sells to the consumer. This
is also called as distribution
 Direct selling
Under this channel ,the producer
of goods attempts to make a
direct contact with the ultimate
user of goods by several
methods of selling including door
to door sales person. This
method is most common in
industrial marketing particularly
in respect of capital goods like
industrial chemicals, heavy
Advantages and limitations of direct
selling
Direct selling to the consumers has the following
advantages to the producers.
1. Close relationship to the consumers makes the producer
constantly aware of changes and other consumer needs.
2. Profit do not go to the middle men
3. Goods get to the consumer more quickly because they do
not have the travel through intermediaries or middlemen.
Limitations
The producer has to spent a handsome amount in
training ,maintaining and supervising a large no of sales
staff.
. It involves cumbersome difficulties in providing and
maintaining inventories of goods at many location to
assure prompt delivery to the customers.
 Producer to retailer to
consumer channel
This is a type of indirect selling.
this channels avoids
wholesalers. it is suitable when
products are perishable and
speed in distribution is
extremely essential. The goods
that are frequently sold in this
channel are fashion merchandise
,products requiring installation,
high value goods etc.
 Producer to wholesaler to
retailer to consumer channel
This channel is also known as traditional channel.
In this system ,the wholesaler is granted a certain
portion of profit ,in return for which he or she buys,
stores ,sells, delivers and extends credits.
This channel is invariably used in respect of
groceries drugs or drug goods etc.
This channel option is particularly suitable to the
following producers:
1. Who lack in financial resources.
2. Whose product line is narrow
3. Whose product are not subjected to fashion
changes
How to select a suitable channel

Study the channels that are available,

more especially those used by the
competitors.
Determine the channel that will best
match the salient characteristic of the
product to be marketed.
Estimate the probable demand for the
product
Consider the available financial
resources
Approximate the costs, sales and