This also known as chain of distribution. It refers to the various stages or channels through which finished goods are moved from the manufacturers or producers to the final consumers. The channel of distribution is the path through which goods move from the producer or manufacturer to the final consumers. The channel is the path through which the owner from the producer to the final consumers. The chain of distribution can be demonstrated by the following scheme.
Manufacturer/producer- Wholesaler- Retailer- Final consumers.
Process of Distribution
The process of distribution of goods involves all human and physical means from the manufacturer to the final consumers. The process of distribution involves the following:
1. Middlemen: The middlemen or agents are human elements from the manufacturers to the final consumers. The middlemen are the wholesalers and retailers. Imagine a rice company which refines tens of thousands of tons of Rice per week (more than 1000 bags of rice per week) and yet individuals come personally to buy Rice from them. They will not only run at a loss, they would not be able to reach out to consumers living afar of. This is where the middlemen come in. Middle men from nearby and far places can come and purchase these goods in bulk and then distribute it in their various channels. Now how can the middle men take these goods to the consumers? This is where the next point comes in.
2. Transportation: This is the medium through which the finished goods are moved by air, land or by water from the manufacturer to the final consumers. The means or mediums of transportation are by Plane, ship, cars, lorries train etc. The type and quantity of goods greatly determines the kind of transportation which would be used to carry these goods. An international wholesaler who imports goods from another continent and in bulk such that he meets the needs of his whole country with such goods will use ships and cargo as a mean of transportation. A middleman who transports some 1000kg of biscuits as his business may use large vehicles and lorries. Also, what do you think about a Car company and a designer company? When transporting a large number of car products to another state, an Aeroplane is needed to do such, but that may not be necessary when transporting designer products unless you are transporting them to another country or continent. SO transportation is very essential in distributive trade.
3. Advertisement: Advertising is the process of creating awareness in the minds of the public about the existence of a product. Advertising may be used to stimulate demand so as to increase sales. Goods can be advertised by radio, television, newspaper, magazine etc. Also the quantity and quality and also demands of goods greatly influences it advertisements. Do not expect a simple shop keeper to advertise his goods on CNN and/or BBC. Its just s small shop and all he needs it to create awareness in his neighborhood. This can be achieve by simple manual ‘conversation’ and ‘verbal-awareness’. And of course The company manufacturing the BMW Car should use the cable networks to advertise to world consumers.
4. Warehousing: Warehousing is a process which ensures that goods produce are stored until they are needed. Warehousing is an important aspect of trade aimed at seeing that there is a regular and steady supply of goods to consumers.
These factors may be very simple and plain and marketers may not even need tor read a book or an article to know what to do. Nevertheless, they are very essential in any form of marketing and hence should be adhered to.