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Product Life Cycle Management

Product Life Cycle Management

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Published by: Dennis Onchieku Onyando on Mar 07, 2013
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10/09/2013

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There are many types of distribution channels. The most important ones are wholesalers, agents,
retailers, the Internet and overseas distributors and direct sales. A description of each is given
bellow.

Wholesalers. These usually buy products from producers in large quantities and sell these to
retailers. They take ownership or title of goods. Most of the times they provide storage facilities
and sometimes take some of the product marketing responsibilities. The wholesaler provides
minimum contact between the producer and the customer.

Agents. They are used mostly in international markets. They will typically secure orders for
products and take commissions from the producer. Agents usually do not tie capital to goods but
sometimes they can stockpile products in cases when products need to get into a market as soon as
they are produced. They are very expensive to train and keeping them under control is a difficult
task due to the distances involved. Also they are difficult to be motivated due to the nature of their
payment.

Retailers. Retailers have a strong relationship with the customers. They will hold a lot of different
products and brands in stock and they will usually offer credit or discounts to the customers. All
products are promoted and merchandised by them. Also the retailers will have the final say on
price.

The Internet. E-commerce is a distribution channel that is growing steadily in the past years. The
Internet offers a large dispersed market to producers. Set up costs can be low and all the e-
commerce technology is easily attainable. Also in recent years there is a shift in commerce and
consumption habits that benefits distribution through the Internet.

NPD Stage 7: Product Commercialisation .

145

Direct sales. Direct sales involve the supply of customers directly from the producer's factory. The
marketing or sales in-house department looks after all contacts. Usually direct sales involve
international sales and require sales personnel or office away from home base.

In some cases one of the above alternatives is sufficient by one's company to bring a new product
into a market. But in other cases a combination of some or all of the above alternatives will bring
the desired result.

Sources:

Marketing Teacher, “Place, Distribution, Channel or Intermediary”, On-line
http://www.marketingteacher.com/Lessons/lesson_place.htm

ICT

USA,

“ICT

Channels

of

Distribution”,

On-line

http://www.emich.edu/ict_usa/CHANNELS_OF_DISTRIBUTION.htm

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