Question

Describe the various types of channels used for distributing the products.

Answer 1

1. Manufacturer-Consumer Channel: The producer sells goods directly to the end consumer and no intermediaries are used. The main advantage of direct distribution is that the product can be sold to the consumer at a competitive price and producers are able to react much faster to the consumer's needs and changing market conditions. For example, Bata sells its shoes directly to the customers through its own stores.
2. Manufacturer-Retailer-Consumer Channel: The majority of consumer products are still sold via retailers. Retailers help producers to achieve wide distribution and develop brand image. Retailers have a much stronger personal relationship with the consumers.
3. Manufacturer-Wholesaler-Retailer-Consumer Channel: In this channel, wholesalers act as a link between the producers and consumers. Where a retailer does not have the purchasing power to buy directly from a manufacturer, he will buy from a wholesaler. The storage and distribution cost are borne by the wholesalers. For example, drugs in our country are sold through this channel.
4. Manufacturer-Agent-Wholesaler-Retailer-Consumer Channel: Agents usually connect buyers and sellers, and manage transfer of good. They never actually own a product. Agents usually take a commission on sales or charge a fee for their services. This channel is commonly used to sell the textiles, agricultural products, machinery and equipment etc.