Producer
have many alternative levels channels available for distributing the product, a
channel levels indicates number of distinct categories of intermediaries in a
distribution channel. These channels vary in the number and types of middlemen
involved. The producer and consumer are part of every channel. Some channel
provides direct link and others indirect link between producers and consumers.
The distributions are generally divided into four types as follows:
Zero
Level Channel - Producer ------------------------------------------------------
Consumer
First
Level Channel – Producer ----------------------------------------Retailer----
Consumer
Second
Level Channel – Producer ------------------Wholesaler-----Retailer----
Consumer
Third
Level Channel – Producer ---Distributor----Wholesaler-----Retailer----
Consumer
A
zero channel comprises of producer and customer. It
also called as Direct distribution channel where product directly sells from
producer to consumer without any middlemen. The major examples are Door to door
sales, Telemarketing, Logistics provided by the organizations to transport
capital goods.
First
level channel contains only one middleman called as
Retailer. In this channel the prouder sells products to retailer who usually
buys in bulk quantities and sells the same to ultimate consumers in different
qualities. Sometime retailer also acts as wholesaler. This channel best
suitable for the consumer durables such as Electronics
Second
level channel is the most common and traditional
channel of distribution. A two-level channel contains two intermediaries such
as Wholesaler and Retailer. This channel is best suited for producers with
limited resource. It also ideal for the products with widely scattered
market.
Third
level channel of distribution in which
three intermediaries are engaged. Under the producer has to transfer the
distribution work for Distributing Agents. Distributing agents simply
facilitate the process of sale and so not take possession or title of products.
This channel is suitable for wider distribution of various industrial products.
The distributor exclusively appointed by the producer based on the experience
and requirement of the market.
Logistic
Management – Is a process of planning, organizing, designing and
controlling the transport activities of the organization. It includes
activities like Acquisition, Storage and transportation, delivery of goods,
etc.
