CHANNELS OF DISTRIBUTION WEEK 5

TOPIC: CHANNELS OF DISTRIBUTION

Performance objectives

By the end of this lesson the students will be able to

1 describe the channel of distribution from manufacturer to the consumer.

2 outline the functions of wholesalers and retailers

3 state the role of government agencies in product distribution

4 identify the problems of distribution

5 explain the role of cooperatives in product distribution

DISTRIBUTION

Distribution is the process of carry goods from the producer to the consumer, it involves the transfer of goods from the place where they are produced to the place where they are needed.

 Distribution channel are the routes though which goods flow from the producer to the consumer.

CHANNEL OF DISTRIBUTION

                                                        R= Retailer

WS= wholesaler

A= Agency

Or    Producer->wholesaler –>Retailer->Consumer

THE MIDDLEMEN

The meddle men are the inter me diaries that link (connect) the manufacture with the consumers. They include the wholesaler, retailer e.tc.

THE WHOLESALER

The wholesaler is the person who buys goods in large quantities form the manufacture/producer and sales in small quantities to the retailers.

FUNCTIONS OF THE WHOLESALER

They perform many functions for the manufacture, retailer and consumers.

FUNCTIONS OF THE WHOLESALER TO THE MANUFACTURERS

1. Provision ofmarket: - They help to find markets for them as well as helping to advertise their product
2. Information: - They serve as an indicator of the state of the market ie.  telling them of the market position of their goods.
3. Financing: - They buy goods from manufacturer and pay them promptly
4. Storage facility: - They provider storage facilities and here releaving the manufactures the need to invest large amount of capital in warehouse.
5. Risk bearing: - They help the manufactures to bear the risks of fall in prices, damage, ordeterioration of a product.
6. Advisory services: - They give useful advice to the manufacture regarding the types of goods to produce. The quantity and the nature of the goods.

FUNCTIONS OF THE WHOLESALER TO THE RETAILERS

1. They enable retailers to stock varieties of product.
2. They break bulk for the retailer making it possible for them to buy goods in bits from them. it wouldn’t be easy for them to buy straight from the manufacturers because they sell in large quantities
3. They provide credit facilities to the retailers by selling good to the retailers on credit.
4. Some wholesalers deliver goods directly to the retailers thus saving them the cost of running their own van.
5. They help to introduce new products to the retailer.
6. They help to promote retailer sale through advertising

RETAILERS

They are the last link in the chain of distribution, retailers are those who buy goods form the wholesaler and sell to the final consumer.

FUNCTIONS

1. They carry variety of goods and make them available to consumer in the area they went.
2. They sometime sell goods on credit to the consumers who cannot pay immediately
3. They give experts advice to consumers on the best brand to purchase as well as usage of the goods
4. Retail trade is easy to establish with little capital. It therefore provides employments to many people.
5. They inform the manufactures on the type of goods consumers want thereby preventing waste of resources. They also inform the consumers on new product and uses. they are the last link in the chain of distribution.
6. They provide after sales service to the consumer eg delivering and servicing of bought items like TV, Cars, radio etc    
7. Their hour of outlayis long and some even work on public holidays making purchases convent and easy for consumers. some of them are situated near residential building.

THE ROLE OF GOVERNMENT AGAINST IN PRODUCT DISTRIBUTION

Government agencies in distribution trade are trading organization set up by the government to participate in the distributive trade. They roles include: -

1. They reduce the number of middle men in the chain of distribution
2. To help reduce the exportation of consumers by the middlemen
3. They help in price stabilization
4. They ensure regular supply of goods
5. To prevent hoarding of goods by the middlemen

CO-OPERATIVE SOCIETY

 A co-operative society is an association of person with common goals and objectives. The co-operative pool their resources together. The co-operative is a democratic organization where, there is equal right despite the difference in contribution among members. The profits are shared on the basis of purchase made by each individual member of the society.

TYPES OF CO-OPERATIVE SOCIETY 

1. Consumers co-operative society is sub-divided into 2

a. Consumer cooperative wholesale association

b. consumer co-operative retailer association

2. farmers’ co-operative society

Role of cooperative in product distribution

1 they grant credit to their members

2 they help to eliminate hoarding by the middlemen

3 they bring products nearer to their members

4 they help to stabilize the prices product by selling them at a cheaper rate to their members

5 the cooperative sell goods in bits to their members

VISUAL CLASS CLIP

PART ONE

PART TWO

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