GOVERNMENT ARTS AND COMMERCE COLLEGE

LARKANA

Subject: Introduction to Business

Class: B.Com Part I
Facilitator: Mrs Sanam Wajahat
Channels of Distribution &
role in Marketing
channels of distribution & role in
Marketing
Marketing Channels are set of
interdependent organizations involved in
the process of making product or service
available for use of consumption. They are
the set of pathways a product or service
follow after production.
channels of distribution & role in
Marketing
Decisions about marketing channels are among
the most critical management decision.
They just not serve market, they make market.
Channels chosen effects all other marketing
decisions.
Firm’s sale depends upon training and motivation
of dealers.
Channels of distribution & role in
Marketing
A distribution channel represents a chain of
businesses or intermediaries through which
the final buyer purchases a good or service.
Distribution channels include wholesalers,
retailers, distributors, and the Internet.
Channels of distribution & role in
Marketing
The primary purpose of any channel of distribution
is to bridge the gap between the producer of a product
and the user of it, whether the parties are located in
the same community or in different countries
thousands of miles apart.
Channels of distribution & role in
Marketing
Distribution channels help businesses by delivering
products on time, regardless of location. They also
keep enough stock, provide market info, promote
goods, assist with finance, create jobs, and handle
delivery risks. Here is the Importance of Distribution
Channels.
Channels of distribution & role in
Marketing
A distribution channel represents a chain of
businesses or intermediaries through which the final
buyer purchases a good or service.
Distribution channels include wholesalers, retailers,
distributors, and the Internet.
In a direct distribution channel, the manufacturer
sells directly to the consumer. Indirect channels
involve multiple intermediaries before the product
ends up in the hands of the consumer.
Channels of distribution & role in
Marketing
Channels of distribution & role in
Marketing
Functions Of Distribution Channel
Assembling, storing, bulk breaking, and sorting of
products.
Moving goods from warehouses to customers.
Managing payment flow pre-sales or post-purchases.
Providing market information to producers.
Promoting the brand and its benefits to end-
customers.
Channels of distribution & role in
Marketing
Importance Of Distribution Channels
Distribution channels help businesses by delivering
products on time, regardless of location. They also
keep enough stock, provide market info, promote
goods, assist with finance, create jobs, and handle
delivery risks. Here is the Importance of Distribution
Channels.
Channels of distribution & role in
Marketing
On-time Delivery
Distribution channels ensure that products are
delivered to customers on time. This is important
because customers can get unhappy if products are
unavailable when needed.
No Distance Issues
Distribution channels remove distance barriers for
businesses. This means businesses can serve
customers who are far away.
Channels of distribution & role in
Marketing
Enough Stock
Distribution channels play a crucial role in keeping enough
products in stock. They store products in warehouses and
supply them as per market demand. This helps prevent
shortages of goods in the market.
Market Information
Businesses use distribution channels to get important market
information. They learn about things like demand, price, and
competition from the intermediaries in the channel.
Customers also give feedback and suggestions, which helps
businesses make good decisions and plan their strategies.
Channels of distribution & role in
Marketing
Product Promotion
Distribution channels promote products by using intermediaries
who inform customers about the products. These intermediaries
introduce new products and explain their features to customers,
motivating them to buy. As a result, distribution channels play an
important role in the efficient marketing and promotion of goods.
Financial Assistance
Businesses receive financial aid from distribution channels.
Intermediaries buy products in bulk from producers and pay
them. They sell products to customers in desired quantities and
offer credit facilities. This helps regulate business funds and
ensures timely payments to producers.
Channels of distribution & role in
Marketing
Employment Opportunities
Distribution channels create jobs by employing many
people in the economy. Wholesalers, retailers, and agents
earn a living in these channels. Therefore, distribution
channels provide employment opportunities for people.
Delivery Risk Management
Businesses face risks, but distribution channels help. They
take on the risk of delivering products safely and on time
to customers. Intermediaries handle the delivery, so
producers can focus on production without worrying
about logistics.
Channels of distribution & role in
Marketing
Importance Of Marketing Channels
Marketing channels are important for businesses
because they provide various benefits that help
manufacturers and customers. Pointers explaining the
importance of marketing channels are shown below.
Information Provider
Middlemen give market information to
manufacturers. They tell about changes in customer
demographics, psychographics, media habits,
competition, and customer preferences.
Channels of distribution & role in
Marketing
Price Stability
Middlemen maintain price stability. They often absorb price
increases to keep prices low for customers. They also control
overheads to maintain prices.
Promotion
Middlemen promote products in their territory. They may
create sales incentive programs to build customer traffic at
other outlets.
Financing
Middlemen finance manufacturers by providing necessary
working capital. They pay in advance for goods and services,
which helps manufacturers fund their operations.
Channels of distribution & role in
Marketing
Title
Most middlemen take title to goods, services, and
trade in their name. This diffuses risks between
manufacturers and middlemen. It also enables
middlemen to have physical possession of goods,
which helps them meet customer demand quickly.
Channels of distribution & role in
Marketing
Channels of distribution
• 0-Level___1-Level____2-Level______3-Level
Channels of distribution & role in
Marketing
Manu
Manufac factur Manufacturer Manufacturer
turer er

Whole Saler
Whole Seller

JOBBER

Manufacturer
Retailer

retailer
consumer
Retailer

Consumer
Consumer
Manufacturer

Manufacturer
Channels of distribution & role in
Marketing
Intermediaries are the middlemen and signify those
individuals in the channels that either take title to take
goods and sell at profit.
They are directly involved in process of flow of goods
from manufacturer to customer.
Channels of distribution & role in
Marketing
Merchant Middlemen
 I. Whole seller
 II. Retailer

Agents
I. Brokers
II. Commission Agents
III. Selling Agents
IV. Factors
V. Clearance Agents
VI. Auctioneer
The End