The Theoretical Framework of Distribution System and Distribution Channel Management

8138 WordsApr 26, 201333 Pages
CHAPTER 1: THE THEORETICAL FRAMEWORK OF DISTRIBUTION SYSTEM AND DISTRIBUTION CHANNEL MANAGEMENT 1.1 Overview about distribution and distribution channel 1.2.1 Concept, roles and purpose of distribution 1.2.2.1 Distribution Distribution is the process of making a product or service available in the right quantities and locations when customers want them, using direct means, or using indirect means with intermediaries. (Willam D. Perreault) It’s a movement of goods and services from source through a distribution channel, right up to the final customer, consumer, or user, and the movement of payment in the opposite direction, right up to the orginial producer or supplier. (Business dictionary) Source: *…show more content…
* Adaptation and finished product: Members of distribution channels will adjust, improve and increase the adaptability of products such as: Classification, packaging ... * Bargaining negotiations: In order to achieve an agreement on price and terms of delivery.This is the implementation phase of the transfer of ownership of products and services. * Circulation: It is done through transport activities and storage of products. * Support finance : To mobilize and use the money to cover the operating expenses of the channel. * Risk sharing: Sharing the risks in the process of distribution of products such as changes in consumer tastes, product damaged during transport and storage ... 1.2.3.6 The role and the importance of distribution channels Manufactures use distribution channel because they recognize that distribution channels sales goods and services more efficient by minimizing the number of sales exposure necessary to satisfy the target market. Through interactions experienced, specialization and scale of activities, distribution channels will do better than the company. It’s role is to make supply and demand match orderly and efficiency. At different levels of the distribution channel perform various marketing functions and different levels. 1.2.3.7 The structure of
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