Distribution (Place) of Marketing Job

Channels :

* Manufacturer to consumer (most direct)
* Manufacturer to wholesaler to retailer to consumer (traditional)
* Manufacturer to agent to retailer to consumer (current)
* Manufacturer to agent to wholesaler to retailer to consumer
* Manufacturer to agent to customer ( ex : DCL,AMWAY )

Manufacturers :

Reasons for direct selling methods :

* Manufacturer wants to demonstrate goods.
* Wholesalers, retailers and agents not actively selling.
* Manufacturer unable to convince wholesalers or retailers to stock product.
* High profit margin added to goods by wholesalers and retailers.
* Middlemen unable to transport.

Reasons for indirect selling methods :

* Manufacturer does not have the financial resources to distribute goods.
* Distribution channels already established.
* Manufacturer has no knowledge of efficient distribution.
* Manufacturer wishes to use capital for further production.
* Too many consumers in a large area; difficult to reach.
* Manufacturer does not have a wide assortment of goods to enable efficient marketing.
* Direct on-selling advantages.

Wholesalers :

Reasons for using wholesalers :

* Bear risk of selling goods to retailer or consumer
* Storage space
* Decrease transport costs
* Grant credit to retailers
* Able to sell for the manufacturers
* Give advice to manufacturers
* Break down products into smaller quantities

Reasons for bypassing wholesalers :

* Limited storage facilities
* Retailers' preferences
* Wholesaler cannot promote products successfully
* Development of wholesalers' own brands
* Desire for closer market contact
* Position of power
* Cost of wholesalers' services
* Price stabilisation
* Need for rapid distribution
* Make more money

Ways of bypassing wholesalers :

* Sales offices or branches
* Mail orders
* Direct sales to retailers
* Travelling agents
* Direct Orders

Agents :

* Commission agents work for anyone who needs their services. They do not acquire ownership of goods but receive del credere commission.
* Selling agents act on an extended contractual basis, selling all of the products of the manufacturer. They have full authority regarding price and terms of sale.
* Buying agents buy goods on behalf of producers and retailers. They have an expert knowledge of the purchasing function.
* Brokers specialize in the sale of one specific product. They receive a brokerage.
* Factory representatives represent more than one manufacturer. They operate within a specific area and sell related lines of goods but have limited authority regarding price and sales terms.