Physical Distribution | Marketing | Notes | Summary - Zigya

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Physical Distribution

Physical Distribution covers all the activities required to physically move goods from manufacturers to the customers. 

Channels Of Distribution

Channels of Distribution are set of firms and individuals that take title, or assist in transferring title, to particular goods or services as it moves from the producers to the consumers.

Components Of Physical Distribution

The main components of physical distribution are explained as follows:

  1. Order Processing.
  2. Transportation.
  3. Warehousing.
  4. Inventory Control.

Functions Of Distribution Channels

Channels of distribution smoothen the flow of goods by creating possession, place and time utilities. The important functions of Distribution Channels are as follows:

  1. Sorting.
  2. Accumulation.
  3. Allocation.
  4. Assorting.
  5. Product Promotion.
  6. Negotiation.
  7. Risk Taking.

Types Of Channels

Channels of Distribution can be classified into two categories:

  1. Direct Channel (Zero Level).
  2. Indirect Channels.

  • Direct Channels

    Direct Channel (Zero level): In this channel manufacturer sells his product directly to the consumers without using any intermediary. Like-Bata, Amway etc.

  • Indirect Channels

    Indirect Channel: When manufacturer involves one or more intermediary to sell or distribute their product to the customers. Indirect distribution network are

    1. One Level Channel: This channel of distribution involves one intermediary to transfer of goods from manufactures to the consumers.
           Manufacturer _______ Retailer ___________Customer
    2. Two Level Channel: This channel of distribution involves two intermediaries to transfer of goods from manufactures to the consumers.
            Manufacturer _________ Wholesaler_________Retailer__________Customer
    3. Three Level Channel: This channel of distribution involves three intermediaries to transfer of goods from manufactures to the consumers.
            Manufacturer ______ Agent _______Wholesaler_________Retailer_________Customer.

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