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The Nature of Distribution

Channels

Channels of Distribution is known as "Place" in the "4
P's" model of Marketing.
Distribution Channels provide the utility of place, of
having products where the customer wants when the
customer wants them. nevertheless, "place" is a
convenient way to think of the term Channels of
Distribution

Why care?
Distribution is particularly important in a
country like Canada with our huge size
and our northern climate. Every spring,
trucks go down through the ice in places
where frozen water is used as a
seasonal road; this truck is sinking in
Lake Winnipeg.
Distribution is
particularly
important in a
country like Canada
with our huge size
and our northern
climate. Every
spring, trucks go
down through the
ice in places where
frozen water is used
as a seasonal road;
this truck is sinking
in Lake Winnipeg.
Distribution Channel
A set of interdependent organizations involved in
the process of making a product or service
available for use or consumption by the
consumer or the business user.
Why Are Marketing Intermediaries Used?

The answer is as simple
as looking at a map of
Canada: 5,000 miles
coast to coast, a heck
of a lot of roads &
railroad track, and most
of the manufacturing
centered in one part of
the country. How are
you as a manufacturer
in southern Ontario
going to know what will
sell in Kamloops, B.C.?
Distribution Channel Functions

Information
Promotion
Contact
Matching
(including such things as manufacturing, grading, assembling, and packaging)
Negotiation Physical Distribution
(transporting and storing)
Financing
Risk Taking
Number of Channel Levels
Direct
Manufacturer
to
Consumer
Indirect
Wholesaling


Wholesalers are generally used when
they are better at performing one or
more of the Distribution Channel
Functions

Channels Strategy and The Use of
Advertising Agencies: A Markets and
Hierarchies Model
Small numbers - only one truck
Frequency - you're using it all the time
Uncertainty - you don't know when you'll
need it
Asset Specificity - reefer is specifically
designed for your purposes