A distribution channel is the route that a product takes from the producer to the final consumer. It can also be referred to as a chain of all the different stages that exist in the distribution process and each stage is referred as an intermediary. Wholesalers: They act as a link between the producers and the retailers.
Retailer: They allow customers the opportunity to purchase goods and services in a familiar environment. They also break bulk but at a lower level, they also store the goods before the customers buy them, they also provide outlets for producers.
Agents: These are there to create an enabling environment for buyers and sellers to exchange goods and services. An agent may not necessarily have the goods but makes it possible for exchange to take place. They provide expertise in areas of import and export legislation for instance.
Factors affecting the distribution of a PRODUCT
Cost: The shorter the channel of distribution the cheaper it is, and hence most p Type of product: The nature of the product is very important in the choice of a distribution channel, e.g. Perishables must be moved quickly.
Type of firm: Larger firms may try to use their own distribution channels because they can afford it.
Spread of the market: If an organisation is spread across the world, like COCA COLA, it will need to have more complex method of distribution in place. On the other hand the smaller organisations will only focus on the supply of the products needed in their area.
Technical aspects of the product
A technical product will need to be distributed directly by the manufacturer and hence bypassing the distribution channels. Control required by the producer some products require the involvement of the producer of the product as a way of maintaining quality. This is true with franchising. Some firms engage in direct selling as way of maintaining product quality.