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Distribution Channels Distribution channel is a structure of interdependent businesses and organizations ranging from the point of origin of product to consumer. A distribution channel consists of individuals and companies involved in transferring ownership of a product as it passes from manufacturer to final consumer or industrial user. The channel of a product extends only to the last person or organization that buys it without major changes in its shape. When changes are made, and rises another product comes in a new channel. (timber-mill-runner-furniture manufacturer, furniture manufacturer, furniture-consumer). There are other institutions involved in the distribution process such as banks, insurance companies, storage and transport. But having no ownership of the products do not participate actively in the purchase or sale, are not formally in the distribution channels. Design of distribution channels Companies sometimes have such different distribution channels. A company wants a distribution channel that not only meets the needs of customers, but also gives you a competitive advantage. It requires a well-organized method for designing channels that satisfy customers and overcome competition.There are 4 choices: 1) Specify the role of a distribution channel strategy should be designed within the context of the overall marketing mix. We review the marketing objectives. 2) Select the type specified channel Once the distribution function in the overall marketing program, we choose the most appropriate channel for the product of the company. It must decide whether to use intermediaries in the channel and if so, which types of intermediaries. 3) Determine the intensity of distribution determines the number of intermediaries involved in the levels of retail and wholesale in a territory. 4) Select specific members of the channel consists of certain companies choose to distribute the product, since there are usually large companies to choose from. When the manufacturer selects certain firms to become part of a distribution channel, it should evaluate factors related to market your product, your company and intermediaries. Two factors are whether the broker sells the market that the manufacturer wants to go and if the intermediary product mix, pricing structure, promotion and customer service are compatible with the needs of manufacturers. Select type of channel The company can use existing channels or new ones to provide better service to existing customers or reach other prospects. By selecting the channels trying to achieve a differential advantage. Direct Distribution Channel formed only by the producer and the consumer. Indirect Distribution Channel consists of the producer, the consumer end and at least one level of intermediaries. In this, the producer must choose the type (s) of intermediate (s) that best meet their needs. Main distribution channels 1) Distribution of consumer goods a) Direct Channel (Producer – consumer) The short and simple channel for distributing consumer goods and does not include brokers.
