The importance of effectively managing distribution channels

The channels of distribution are designed to achieve following objectives: The first objective is to make available the product to the consumer who wants to buy it. The availability has two aspects — the desired level of coverage in terms of appropriate retail outlets and secondly, the positioning of the product within the store. Product availability is important for consumer convenience goods, where customer does not wait to buy a particular brand.

The importance of effectively managing distribution channels

Imagine a customer has to contact the manufacturer for the products like shampoo, soaps, etc. It will be a big hassle for the customer who would rather prefer something that is easily accessible.

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Making the products available effectively and efficiently to the end consumers is taken care under the place concept of the marketing mix also known as marketing channel or distribution channel.

Decisions concerning distribution channels are of utmost importance to manufacturers. It is concerned with how the product gets through the producer to the consumer. Most of the manufacturers do not sell the products to the end users.

They use a set of intermediaries which perform different roles in the channel network. Each member in this chain or channel serves as a link in the distribution network linking the manufacturer to the end user.

Supply Chain Management involves the management of materials, information, etc. This area of marketing if properly executed reduces costs to a great extent.

This is the reason this arm of marketing is gaining much importance, and organizations constantly strive to employ a right candidate for this role. Advertisements Management of the supply of materials and information from the suppliers source to the end customer is Supply Chain Management.

Distribution Channels - Meaning and Their Significance

It begins from the suppliers who provide raw materials, etc. This includes the storage activity as well of the materials and products. Supply chain management encompasses the flow of materials and information up and down the chain.

All the activities of managing the supply as well as storage incurs the costs for the organization. Marketers strive to bring efficiency in this function to reduce the costs. These costs finally get added to the price of the product.

If this function is managed most efficiently, the price of the final product will be less and will help the organization gain competitive advantage. It also gives great opportunity to increase the cost to profit margin and increased profits to the organization.

The importance of effectively managing distribution channels

Reducing costs is part of supply chain. Value Chain is another term used interchangeably with the term supply chain.

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Most of the organizations produce products at a certain location for efficiency through large-scale production. The buyers of these products are spread all over the world. This necessitates the function of making the products available to buyers.

This function of connecting the manufacturer with the buyers by distribution of goods and information comes under Marketing Channels. Marketing Channel involves all the people and organizations that are focused on providing value to the customer downstream via buying, selling and promoting the product to the customers.

These organizations that perform the marketing activities of buying, selling and promoting a product are called as intermediaries, middlemen or resellers. For example, the producer of raw materials that supplies these to the manufacturers for making a product forms part of the Supply Chain and not Marketing Channel.

Marketing channel is only concerned about the channel flows physical goods, ownership, payments, etc. These are set of organizations linked to each other which are concerned with making an offering available for the user. The characteristics of all these organizations middlemen, intermediaries, resellers help an organization to determine which of these intermediaries to utilize or to not utilize them at all.

That is to make a decision of selling the offering directly to the consumer or via intermediaries. As involvement of marketing channels results in costs, important decisions are made on selection of these channels and designing an effective and efficient marketing channel network.

Advertisements Definitions of Marketing Channel — Marketing channels are set of interdependent organizations involved in the process of making a product or service available for use or consumption. Marketing channel or Marketing intermediaries are organisations that are responsible for the distribution function of connecting manufacturers to consumers.

One who specialises in performing operations of rendering services that are directly involved in the purchase and sale of goods in process of their flow from producers to the users. Various intermediaries like wholesalers, retailers, agents, etc.

Supply chain encompasses all the organisations involved in producing, marketing and delivering of products to consumers.Distribution channels are defined and classified. Their development is explained and new possibilities of their development in contemporary conditions are indicated.

In this sense, a variety of distribution channels exists, as well as the contemporary understanding of managing supply chains and value creation networks. Managing channels of distribution in the age of electronic commerce Kevin L. Webb* distribution channels are threatened by online e-commerce [4].

The importance of effectively managing distribution channels

How supplier organizations manage this channel con- distribution channel is an important research question [10]. Complex distribution systems. Distribution Channel Planning and Management: Why are They so Important? At the end of this module you will know the steps to designing and managing a distribution channel.

You will also be able to identify the most important players in .

CHANNELS OF DISTRIBUTION enhance communication flows and the flow of money and title to goods. The latest trend is to try to eliminate wholesalers and the need for retail stores by selling over the Internet. Channel of Distribution plays a very important role in achieving the marketing objectives of a company. Undoubtedly, the manufacturer of product or services creates involve utility but the distribution channels create time and place utilities. According to Drucker, “both the market and distribution channels are offer more crucial than the product. THE IMPORTANCE OF CHANNELS OF DISTRIBUTION. but they are more effective than manufacturers. ADMINISTERED DISTRIBUTION SYSTEM. The management by producers of all the marketing functions at the retail level is called an ADMINISTERED DISTRIBUTION SYSTEM. Retailers cooperate because they get so much free help.

At the end of this module you will know the steps to designing and managing a distribution channel. You will also be able to identify the most important players in distribution channels and their roles.

warehousing, and that is very important to use an effective logistic. Dristribution Channels perform a crucial role in the successful distribution and marketing of all products. They have various contacts, expertise and wider knowledge of the products.

The rapidly growing markets and increasing complexities of distribution have increased the . Distribution Channel Management Optimizing the customer experience Regardless of your business model, this intensive program will teach you how to design, develop, maintain and manage productive go-to-market relationships that optimize the customer experience.

Distribution Channel Management & Strategy | Kellogg Executive Education