What do you mean by 'channels of distribution'? What functions do they play in the distribution of goods and services? Explain.
Answers
SOLUTION :
Channels of distribution :
It is concerned with making the goods or services available to the end users so that they can buy or avail such goods and services.
Functions of channels of distribution of goods and services :
(a) Sorting :
The middleman obtain supplies of goods from various producers or wholesaler which are in different sizes, quality and nature. The middle men classify them into different quality and size.
(b) Accumulation :
The middleman collects varieties of product from various sources and make them available at Central part of the distribution.
(c) Allocation :
The intermediaries break the large lots of goods into smaller lots so that these can easily be sold in the market.
(d) Product promotion :
Sometimes the middleman also involved themselves in demonstration, special displays , contests etc. which are normally done and borne by the manufacturers.
(e) Negotiation :
Channels of distribution negotiate not only with the manufacturer's but also with the customers too on the price, quantity, quality, guarantee, warrantee matters and help in transfer of ownership of product.
(f) Risk taking :
Channels of distribution store of goods in their custody and make them available when the demand arises. Thus they assume the risk of storage, price fluctuations, spoilage, fall in demand etc.
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Hey Dear !
=) A distribution channel is the way or course chosen by the organization to convey its great or administration to the clients. The course can be as short as an immediate cooperation between the organization and the client or can incorporate a few interconnected middle people like wholesalers, merchants, retailers, and so on.
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