One of the four Ps of marketing mix is “Place” or “Distribution”. In the economic terms, any product, being capable of giving customer satisfaction needs to have “place” and “time”‘ utility. All endeavors of production will come to nought, if the products do not reach the consumers for consumption.
Generally most producers do not sell their products directly to the final users. Between the producer and the end user there stands a set of intermediaries performing a variety of functions and they form a Marketing Channel. These intermediaries can be called as Distributors, Wholesalers, Retailers, and Agents etc.
Marketing Channels are the set of pathways a product or service follows after production culminating in purchase for use or consumption. Network consists of the Firm, Suppliers, Distributors, Wholeealers, Retailers and finally the customers who work with each other to create the value for the customer.
Functions of Distribution Channels:
- Promotion: Communicating about the product for stimulating purchase. They also provide presales and after sales service to the customers.
- Contact: They carry out the function of locating and communicating with the prospective buyers. The distribution channel owing to its physical proximy to consumers helps in smooth sales process and brings together consumer and producer efficiently.
- Matching: The distribution channel partners shape and fit the offer to the buyer’s needs including alterations, grading, assembling and packaging. Specific requirement of the consumers are taken care of.
- Negotiation: They negotiate and settle the final price and other terms and conditions with the buyer. They also communicate the producer regarding the customer’s reaction about the price.
- Physical distribution: The channels perform the distribution function by transporting and storing the goods for making it finally available to the consumers.
- Financing: They acquire and use funds for financing the distribution operations. The distributors buy goods in bulk from the producers either by remitting cash or availing credit facilities with various terms and conditions.
Distribution Channel Types:
- Zero Level Channel: It is direct marketing. From the producer direct to the customer. e.g. Internet sale, door to door sale
- One- level Channel: One selling intermediary such as a retailer
- Two- level Channel: Two selling intermediaries, via a wholesaler and retailer
- Three-level Channel: Three intermediaries i.e, wholesaler to jobbers who sell to retailers.
CHANNELS FOR BANKING SERVICES:
Bank Branches are the primary distribution outlet for banking services. The bank branches can be classified into two :
- General Branch which provides all kinds of banking services such as deposits, Loans remittances; money transfers etc
- Specialty Branch which handles specialized banking business for specific type of clients like personal banking, international banking and Trade Finance.
Intermediaries in Banking Service:
- Direct sales agents: For selling housing loans, auto loans etc.
- Automobile dealers: They enter into tie-up with certain banks for selling its auto loans.
- Merchant Establishments: These establishments accept Credit Card or Debit Card of Banks for facilitating purchase.