MAJOR CHANNELS, CHANNELS OF CONSUME PRODUCTS, CHANNEL OF INDUSTRIAL PRODUCTS

The words 'Channel' has its origin to the French words used for 'canal'. This channel is a route through which goods passes from one end to another. In other words, the route through which goods move from the place of production of products to the place of consumption is called 'channel' of distribution. Channels of distribution are the means 'channel of distribution'. Channels of distribution are the means employed by manufacturers and sellers to get the products to reach the market and thereby into the hand of consumers. Thus, Channel of distribution refers to various agencies through which the goods flow from the producer to the consumer. The channels of distribution are also known as the 'Trade Channel'.

"Channel of distribution is the structure of intro company organization units and extra company agent and dealers, wholesale and retail, through which a commodity, product or service is marketed."

CHARACTERISTIC OR ELEMENTS OF CHANNEL OF DISTRIBUTION

1. Route or Pathway

2. Flow

3. Composition

4. Function

5. Remuneration

FACTORS INFLUENCE CHANNEL DECISIONS

i) Factors Relation to Production characteristics

1.Industrial/Customer Product

2.Perishability

3. Unit Value

4. Style Obsolescence

5. Weight and Technicality

6. Standardized Products

7. Purchase Frequency

8. Newness and Market Acceptance

9. Seasonality

10. Product Breadth

ii) Factors Relating to the Company's Characteristics

1)Financial Strength

2) Marketing Policies

3) Size of the Company

4) Past Channel Experience

5) Product mix

6) Reputation

iii) Factors Relating Market or Consumer's characteristics

1) Consumer's Buying Habits

2) Location of the Market

3) Number of Customers

4) Size of Orders

iv)Factors Relating To Middleman Considerations

1)Sales Volume Potential

2) Availability of Middleman

3) Middlemen's Attitude

4) Service Provided by Middleman

5) Cost of Channel

v) Factors Relating to Environmental Characteristics

1) Economic Conditions

2) Legal Restrictions

3) Company's Channel

4) Fiscal Structure

MAJOR CHANNELS

According to R.S.Davar,

There are three main types of channels of distribution, as given below:

i)Producer------à Ultimate Consumer

ii)Producer----àRetailer--àUltimate Consumer

iii)Producer--àWholesaleràRetaileràUltimate Consumer

According to Philip Kotler, the four main types of channels of distribution are as follows:

i)Producer------à Ultimate Consumer

ii) Producer----àRetailer--àUltimate Consumer

iii)Producer--àWholesaleràRetaileràUltimate Consumer

iv) Producer--àWholesaler-àJobberàRetaileràUltimate Consumer

William j. Stanton Has suggested the following five types of channels of distribution for consumer goods:

i)Producer---------------------à Ultimate Consumer

ii) Producer-----àRetailer--------àUltimate Consumer

iii)Producer-----àWholesaler---àRetailer----àUltimate Consumer

iv) Producer--àAgent---àRetaileràUltimate Consumer

V) Producer--àAgent-àWholesaleràRetaileràUltimate Consumer

From the above, it is clear that opinion differs as to types of channels of distribution. However, most the popular and common channel of distribution used for bringing the products in the market from the producers to the ultimate consumer can be defined under two headings.

A.CHANNELS OF CONSUMER PRODUCTS

1)Product-------àUltimate Consumer

2)Producer---àRetailer----àUltimate Consumer

3)Producer -àWholesaler-àRetailer-àUltimate Consumer

4)Producer-àAgentàWholesaleràRetailer-àUltimate Consumer

5)ProduceràWholesaleràUltimate Consumer

B)CHANNELS OF INDUSTRIAL PRODUCT

1)Producer------àIndustrial User

2)Producer-----àWholesaler--àIndustrial Users

3)Producer--àAgent--àIndustrial Users

4)Producer---àAgent-àIndustrial Distributor-àIndustrial User