Distribution is the process which makes a firm's products available to consumers, in suitable places, at the right.
times, and in appropriate quantities. The group of people (or organisations) who operate this process make up a.
channel of distribution; if they are part of the production firm and are distributing direct to the consumers, this.
can be further defined as a direct channel of distribution. Firms have to make choices about which type of.
distribution channel is best for them, their product, and the consumers.
A distribution channel can involve various categories of middlemen/intermediaries: facilitators, providing.
physical distribution (transport, storage, display), advertising, and financing; agents and brokers (paid by.
commission) who find customers and perform negotiations, and merchant middlemen who buy, take title to, and.
then resell products (at a profit). Functions provided by facilitators are generally necessary, while others merely.
assist the process. Generally, zero-level (direct) up to three-level (with agents/brokers, wholesalers, and retailers).
channels are possible; for industrial products up to two-level (agents, and industrial distributors) channels are.
typical.
Benefits of intermediaries in general.
A major advantage which intermediaries can have, over producers distributing direct, is the ability to take in many.
goods from many different producers, and then offer a range of related or complimentary goods to the consumers.
If the intermediary is a transport firm, it can cut costs with physically small products by putting them in the same.
truck or warehouse; an advertising agency can use the same expertise and equipment between several portfolios; a.
broker can carry more weight in negotiations by representing a range of products from different producers. Such a.
grouping together of products is known as an assortment. Whether this is beneficial (in reducing costs) or not.
depends on the type of product; large or incompatible product shipments cannot be more cheaply transported.
