DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : A.Srinivas Kumar
Designation : Senior lecturer
Branch : DCCP
Institution : Government polytechnic for
women, Nandigama
Year/semester : I year
Subject code : Ccp-104
Topic : Distribution network
Duration : 50 mts.
Sub topic : Advantages of distribution channels
Teaching aids : PPTs
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Objectives

On completion of this period, you would be able

to:
 Know the advantages of channels of
distribution
 Reasons for channels of distribution
 Central theme of the channels of
distribution

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Recap

In the previous class we have dealt with

 Home trade
 Various divisions of home trade like wholesaler
and retailer

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Advantages of direct channel

 When the goods are perishable in nature,

there is every need to dispose off the
stock at the earliest
 Ex. Vegetables, milk, eggs etc.,
 If the output is less and market is limited
direct channel is desirable
 Ex. Cakes, bread etc.,

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Advantages of direct channel…

 If the goods cater to the needs of a special

class of people and purchased only by
them, direct channel is desirable
 Ex. X-ray equipment is purchased
only by hospitals and nursing homes
and producers intend to sell such
equipment directly to them

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Advantages of direct channel

 If the goods produced are technical in

nature and required demonstration to the
consumers , direct channel is desirable
 Ex. Heavy machinery goods,
computer, Xerox Machines etc.,

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Advantages of direct channel…

 If a new product is introduced into the market, the

manufacturer tries to contact the consumers
directly to explain the qualities of the product
through his salesmen
 Ex. Henko detergent powder was released in
the market, door to door sales was
undertaken by the Henker Spic India Ltd to
explain the quality and superiority of the
product over competitors’ product

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Advantages of direct channel…
 If the goods can be sent easily by post such as
text books or general books, exercise equipment
etc., the producer can adopt direct selling
 Ex. Telugu Akademy sends the books
ordered by post to the desired
consumers
 If the manufacturer has a large network of retail
shops, direct selling is desirable
 Ex. Bata shoe company, DCM etc.,
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Advantages of direct channel…

 Availability of public and private

warehouses
 Need to undertake special promotional
efforts
 Exploitation and non-co-operation from
the middlemen
 Need to maintain quality of products,
firms of sale, etc.,
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Reasons for direct channel
 Growing competition resulted in close control
over the market
 Need to reduce the marketing costs by large
scale distribution
 Wide product line resulting in economical use of
sales force
 Need for providing after sales service
 Concentrated market near the place of
production

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Summary
In this lesson we have learnt

 When the goods are perishable in nature,

there is every need to dispose off the stock at
the earliest
 If the output is less and market is limited
direct channel is desirable
 If new product is introduced into the market,
the manufacturer tries to contact the
consumers directly to explain the qualities of
the product through his salesmen

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Frequently asked questions

1. What are the advantages of channels of

distribution?
2. What are the reasons for channels of
distribution?

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