Explain the types of Distribution Channels in Detail:

Types of Distribution Channels

Before we talk about the various types of distribution channels, it is important to know the distribution channels definition. “The route or the path through which product is transferred from the place of the production the final consumers is known as distribution channels.”  You may transferred goods through both direct and indirect ways. A distribution channels may called direct, when the manufacturer supplies the goods directly to the ultimate consumer and uses no intermediaries. Here the marketing functions are carried out by the manufacturer of product by him. If a manufacturer sells the goods to the consumers through one or more than one middlemen, the channel is called indirect channel of distribution. In indirect channel of distribution, the functions of buying, selling, transporting, storing, are undertaken by the middlemen.

Types of Distribution Channels in Marketing

There are four major types of distribution channels, which are as below. You need to be aware of them all.

• Direct Channel.
• Indirect Channel.
• Selective Distributive Channel.
• Intensive Distributive Channel.

1. Direct Channel

When the manufacturer or the producer supplies goods directly to the consumers is called direct channel. The manufacturer in this stage of distribution channels performs all the marketing functions himself. No middleman is involved. In the direct channels of distribution, the manufacturer attempts to reach the consumers through his

• Own retail stores,
• House to house selling,
• By mail and
• By sales from the factory door.

The manufacturer to consumer link no doubt appears to be simple and low cost method of distribution channels, but it is not practicable for marketing of the large amount of consumer goods. Imagine for a moment, the difficulties which a producer of soap, hairpins, toothpaste, shoe polish, cigarettes, beverages etc will face in selling the goods directly to the consumers.

2. Indirect Channel

Indirect channel are also called exclusive distribution channels. It can be defined as marketing of goods first to retailer who in turn sell it to consumers is known as Indirect Channel of distribution. It is a most effective method of products distributions, and effectively used for promoting clothes, machines, automobiles, furniture’s etc. The reasons for selecting indirect channels of distribution are:

• Better control on the supply of goods.
• Speedy disposal of products.
• Lesser expenses on selling.
• Better training of sales people and
• Rapid feedback.

3. Selective Distributive Channel

The marketing through Wholesaler is one of the widely used ways of distribution in all over the world. These distribution Channels enables the manufacturer to sell goods in lot to a few selected wholesalers, who sell it to retailers, who further in turn to sell products to the consumers. The wholesaler acting as middleman, take little to the goods, assume risks, appoint dependable retailers, provide goods on cash as well as a credit and thus spreads sale on a wide market. These types of distribution channels are effective for the promotion of drugs, hardware, tobacco, toys, food products etc.

4. Intensive Distributive Channel

In intensive distribution channels, the producer uses many wholesalers and retail middlemen for the promotion of the product. The producer uses this route of marketing for saturating the market with the product.

Distribution Channels for Industrial Goods

The distribution channels through which the industrial goods travel from the place of the production to the final consumers is known as industrial distribution channels. In the distribution of industrial goods, there are fewer middlemen and shorter channel of distribution, which should be in your mind:-

1. Technical Information

The industrial goods are mostly purchased by the industrial users in large quantities. They are therefore, purchases directly from the manufacturer of the source of supply.

2. Purchase in bulk

The industrial user buys products mostly of technical nature. The technical information regarding the performance, standard of the product, the installation of machinery, the maintenance services etc cannot be reliably furnished through the middlemen. The industrial user thus wants direct dealing with the manufacturer to get full technical information of products. The middleman is thus eliminated from the distribution channels.

3. Direct Contact

Another reason for short channel of distribution for industrial goods is that most of the industrial markets are generally concentrated in a small geographical area. The purchasers of industrial goods directly contact the sellers and thus there does not arise the need of the agent.

4. Contact on Telephone & Fax: industrial users generally purchase good in bulk. The cost of direct correspondence is probably through contacts on telephones, mobile number, Fax, or in person etc. The buyers therefore, eliminate middleman and contact the manufacturer directly for the purchase of industrial goods.