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   /   m   o   c Question No. 23: Define Channe Channels ls of o f Distribut ion? . What are the major t ypes?   e  An  A n s w er: er :   e   r CHANNELS OF DISTRIBUTION: INTRODUCTION:    f The channel of   e Distribution means the Path or Rout, which products follow   npoint of consumpti from the point point of production production to the point consumption. on. It    iagents and distributors. includes wholesalers, retailers,  Actually channel channel is divided into    ltwo categories. DEFINITIONS:   n According to DOUGLAS FOSTER:   o “A channel of dist dist ribut ion is t he pat h, w hich hich product product s    l consumer t ake from t he produc produce er t o ult imat e cons umer or indust indust rial    luser.”    a According to E.J.MECCARTHY: “Channel “Channel of dist dis.t ribut ion is any series of fi rm or   w er t o final individuals indivi duals fr om producer produc f inal user user or consumer.”  consumer.”    w TYPES OF CHANNEL OF DISTRIBUTION: DISTRIBUTION:   w DIRECT DIRECT CHANNEL: CHANNEL :    / If producer sells the goods directly to    / direct channel. consumer, it is called   : : INDIRECT INDIRECT CHANNEL: CHANNEL If  p  producer sells the goods to consumer through middlemen, it is called indirect channel. Kinds    t    t    h

   /   m of   o goods:   cThere are two main kinds of . goods:   e (A) Consumer   e Goods   r ial Good (B) Industr Goods s    f   e  A A - CONSUMER GOODS: GOODS:   n Consumer goods mean that form of goods, which are wanted by the consumers i.e.   i Food, Manufactured goods. The purchasing power of the   l consumer further divided into three kinds.   n Convenie onv enience nce goods: goods :   o    l Shopping goods:    l Specially goods:   a B- INDU INDUST STRI RIAL AL GO GOOD ODS: S: . Industrial goods mean those goods, which are purchased   wgoods. These goods satisfy for producing the other   w These goods are: consumer wants indirectly. Raw Raw material:   w    / Semi manuf manufactured actured good s:    / Capital goods   ::   p     t    t    h

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   /   m   o COMMON POINTS OF CONSUMER AND INDUSTRIAL   c GOODS: . Producer to Consumer / User: User:   e Some producers adopt the direct channel of   edirectly to the distribution and they supply the goods consumers without any middlemen.  r The nature of these types of goods small-scale production    f   e   n Producer t o Retailer Retailer to t o Consumer/ Cons umer/ User: User:    i Some times a producer   l adopts this channel and supplies the goods directly to the retailer. And retailer   n supplies goods directly to the consumer. In this way the   o profit of the wholesaler is saved.    l    l   a .   w   w   w    /    /   :   p     t    t    h CONSUMER

 ETAILER

WHOLESELLER

   /   m   o Producer t o Wholesaler Wholesaler to t o Retailer Retailer to  c Consumer/ ons umer/ User: . In this type of channel there are  e two middlemen involved such as wholesaler and retailer this strategy is   e adopted is in the large-scale business. The Wholesaler   r sells the goods to retailer.    f   e   n    i    l Producer to Agents to Retailer Retailer to Consu mer/ User: User:   n instead of whole sellers Many producers prefer to agents they give the commission to  o the agent who reach them to the large-scale retailers and    lfrom retailers to consumer.    l   a .   w   w   w    / Producer to Agents t o Wholesaler Wholesaler to Retailer Retailer to    / Consumer/ User:   :  According to this channel, producer hires some agents to   p through them and paid some amount of sell the product    t    t    h  RODUCER

   /   m commission. The agents sell to whole sell from wholesaler   o to retailer and from retailer to final consumer.   c .   e   e   r    f   e NOTE: For Indu Industr strial ial Good Goods: s:   n If we consider the industrial goods instead of    i consumer then we will be User.    l   n   o    l    l   a .   w   w   w    /    /   :   p     t    t    h

CONCLUSION: In short, channels are the blood for the business because without these channels the life of business would be stopped. In different kinds of business there are different kinds of channels which play their role in the promotion of business.