With their help, it is possible to build the sales process more efficiently, optimize the costs that the manufacturing company would have to bear if it decided to enter the market independently. Through sales and distribution channels, it is possible to quickly capture a segment or launch sales of a new product, making it available to japan phone number the buyer.
What is a distribution channel?
The efficiency of any such channel can be assessed by the continuity of supply of the promoted goods or services from the organization that produces them to the end user. This process usually consists of four stages:
The product or service is produced.
What is created is purchased by wholesale buyers.
The product is sold through retail outlets.
The end customer pays for the purchased product and starts using it.
In a chain, which is any channel for selling goods, there are intermediaries, a manufacturer and consumers. The first (without them this process will not happen, they are its integral part) do not mean sellers and agents. A channel is a special structure created for the purpose of selling products.
Read also!
"USP examples to help you come up with your own that's even better"
Read more
Characteristics and functions of distribution channels
In marketing, any distribution channel has three main characteristics: its levels, width and length:
Length is the number of intermediaries in the distribution chain (its links).
Width is the number of participants within each such section. For example, if a company sells its products in three retail chains, then this indicator of its distribution channel is three.
And finally, a level is called each intermediary in the distribution and sales chain that somehow participates in the movement of goods to the consumer.
For example, a manufacturer sells cars through a single intermediary – a specialized showroom. The length of the channel is equal to one, the width is also equal (after all, all cars are sold in one place). This showroom is counted as the only level in a single-level sales channel.
In addition to these three parameters, the functions of each link in this chain and the specifics of their interaction with each other play a huge role.
In marketing, the following classification of distribution channel functions is adopted:
Research : gather information about the market.
Sales promotion : to encourage the consumer to purchase as many products as possible.
Contact : to form and maintain feedback with clients. You can use the most effective methods to take contacts from the client .
Negotiations : agree and change sales conditions (service, cost, packaging), approve them.
Organization : ensure the movement of goods along the chain (in fact, these are purely logistical tasks - load, transport, store in warehouses).
Finding finance : finding money to offset distribution costs.
Risks : assume full responsibility for the movement of goods through the distribution channel.
Thus, the sale of products occupies a significant place among the business processes of any enterprise. Having dealt with the terminology, let us now consider the types of distribution channels of the organization.