>> June 14, 2010
Channel of distribution are the intermediaries which transfer goods from producers to consumers. Thus marketing channel are useful for proper distribution of goods and services. Following are main principles which apply on the channel of distribution.
1. The principle of minimum total cost of transaction :
Suppose, if goods are transferred to direct, the cost of transferring goods is Rs. 10.
But if it is purchased by channel of distribution, its cost is Rs. 2, it will be useful to reduce the cost of producers.
2. The principle of smoothness gap in assortment and sorting :
The intermediaries takes the goods and save it in store and sells it when consumer needs the goods. So, manufacturing needs intermediaries.
3. The principle of searching :
Channel of distribution creates the market of specific goods where consumer can search and buy.
4. Personal Touch
The channel of distribution close to the consumer, so they can know the needs of consumer and solve the problems of consumers.