Channels of Distribution.pdf

Distribution is significant rated as a significant function of marketing. After
production a product moves to the market and finally to the consumer.
▪ This journey of the product from the manufacturer or producer to the consumer is
made possible through certain defined paths, termed as, “Channels of
Distribution”

1. D. R. Chandravanshi
Asst. Professor (Ad hoc)
Department of Pharmacy,
Guru Ghasidas Vishwavidyalaya Bilaspur C.G.

2. ▪Introduction
▪Wholesale trade and wholesaler
▪Retail trade and retailers
▪Departmental stores
▪Multiple shops
▪Mail order sales houses
▪Consumer cooperative stores
▪Super markets
▪Factors affecting the selection of channel of distribution

3. ▪Distributionissignificantratedasasignificantfunctionofmarketing.After
productionaproductmovestothemarketandfinallytotheconsumer.
▪Thisjourneyoftheproductfromthemanufacturerorproducertotheconsumeris
madepossiblethroughcertaindefinedpaths,termedas,“Channelsof
Distribution”
Channels of
Distribution
Direct Channel
(Short, Straight & Direct)
Indirect Channel
(Long, Indirect, Depend on Middle men)
One level
Two Level
Three Level

4. ▪ChannelsofDistribution-Afterproduction,aproductmovestothemarketand
finallytotheconsumer.Onthebasisofinvolvementofmiddlementhechannelof
distributioncanbedividedasfollows:
1.Directchannel(Zerolevel).Inthiscasenomiddlemenisinvolvedand
producesaresolddirectlybythemanufacturertotheconsumer.
MANUFACTURER CONSUMER
DIRECT
NO MIDDLE MEN

5. 2.IndirectChannels.Thesechannelsareindirect,longandrequiretheaidof
speciallyqualified/skilledpeoplefoethedistribution.Sincethesepeopleactas
intermediariesbetweentheproducerandconsumerforthedistributionofgoods,
thesearecalledas“MiddleMen.”Dependingonthenumberofmiddlemen
involvedatdifferentlevels,thesearefurtherclassifiedas:
MANUFACTURER CONSUMER
RETAILER
MIDDLE MEN
1. ONE LEVEL

6. 2. TWO LEVEL
MANUFACTURERS
CONSUMER
WHOLESELLERS
MIDDLE MEN AT FIRST
LEVEL
MIDDLE MEN AT
SECOND LEVEL
RETAILERS
3. THREE LEVEL
MANUFACTURERS
CONSUMER
DISTRIBUTOR
MIDDLE MEN AT FIRST
LEVEL
MIDDLE MEN AT
SECOND LEVEL
WHOLESELLERS
MIDDLE MEN AT THIRD
LEVEL
RETAILERS

7. ▪Distribution ofpharmaceuticals is governed by certain rules under Drugs and
Cosmetics Act (1945).
▪Direct channels are not allowed in pharmaceuticals.
▪Various channels are as follows:
MANUFACTURERS PHYSICIAN CONSUMER
MANUFACTUR
ERS
PHYSICIAN PHARMACIST PATIENT
MANUFACTUR
ERS
WHOLESELLE
R
PHYSICIAN PATIENT
MANUFACTUR
ERS
WHOLESELLE
RS
RETAILERS PATIENT

8. ▪Wholeseller is a middle man between manufacturer and retailer and the business
is called as wholesale trade.
Functions of wholesellers.
•Quick Distribution.
•Warehousing
•Assembling
•Advertising
•Grading/packaging
•Transportation
•Risk bearing