CHANNELS OF DISTRIBUTION
A channel of distribution is the route or path followed by a product as it moves from the producer to the consumer/final user.
TYPES OF DISTRIBUTION CHANNELS USED
They are mainly classified into two main categories i.e.
- Direct/zero channel.
- Indirect channel.
1) DIRECT MARKETING/ZERO CHANNEL (PRODUCER-CONSUMER)
This is the distribution system where no intermediary is used and the company sells the product directly to the consumer.
REASONS FOR GROWTH OF DIRECT/ZERO MARKETING
- High cost of driving, traffic congestion and packing headaches. Have made people prefer goods to be directly delivered to their homes.
- Lack of enough/inadequate/insufficient time.
- The market is now comprised of high market nitches (narrowly defined groups),each with different preferences.
- Long queues at counters.
- Electronic communication is growing and products can now be sold through the internet.
ADVANTAGES OF DIRECT MARKETING
- Home shopping is convenient.
- Saves time
- Customers can do comparative shopping by browsing the internet.
- Customers benefit by learning about available products without meeting a sales person.
- It can be timed to reach customers at the right moment e.g. at home.
MAJOR CHANNELS FOR DIRECT MARKETING
- Direct mail.
- Tele marketing-calling through telephone.
- Kiosk marketing-this is placing machines in busy places such as airports and bus stops where customers can get specific goods e.g. stamps, sweets and soft drinks a good example is the automatic vending machines.
2. INDIRECT CHANNELS.
- One level channel e.g. producer-retailer-consumer.
- Two level channel e.g. producer-wholesaler-retailer-consumer.
- Three level channel e.g. producer-agent/broker-wholesaler-retailer-consumer.