PLACE/DISTRIBUTION/TRANSPORTATION

CHANNELS OF DISTRIBUTION

A channel of distribution is the route or path followed by a product as it moves from the producer to the consumer/final user.

TYPES OF DISTRIBUTION CHANNELS USED.

They are mainly classified into two main categories ie

• Direct/zero channel.
• Indirect channel.
• DIRECT MARKETING/ZERO CHANNEL(PRODUCER-CONSUMER).

This is the distribution system where no intermediary is used and the company sells the product directly to the consumer.

REASONS FOR GROWTH OF DIRECT/ZERO MARKETING.

1. High cost of driving,traffic congestion and packing headaches. Have made people prefer goods to be directly delivered to their homes.
2. Lack of enough/inadequate/insufficient time.

• The market is now comprised of high market nitches(narrowly defined groups),each with different preferences.

1. Long queues at counters.
2. Electronic communication is growing and products can now be sold through the internet.

ADVANTAGES OF DIRECT  MARKETING.

1. Home shopping is convenient.
2. Saves time
3. Customers can do comparative shopping by browsing the internet.
4. Customers benefit by learning about available products without meeting a sales person.
5. It can be timed to reach customers at the right moment e.g. at home.

MAJOR CHANNELS FOR DIRECT MARKETING.

1. Direct mail.
2. Tele marketing-calling through telephone.
3. Kiosk marketing-this is placing machines in busy places such as airports and bus stops where customers can get specific goods e.g. stamps,sweets and soft drinks a good example is the automatic vending machines.
4. Internet.

2.INDIRECT CHANNELS.

• One level channel e.g. producer-retailer-consumer.
• Two level channel e.g. producer-wholesaler-retailer-consumer.

Producer-agent/broker-retailer-consumer.

• Three level channel e.g. producer-agent/broker-wholesaler-retailer-consumer.

Producer-wholesaler- jobber-retailer-consumer.