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Saturday, 6 October 2018

Functions of Distribution Channels



   Although some aspects of the physical distribution are contained in these functions, more discussions on physical distribution are in separate subunit of this chapter. From the point of production to that of consumption, a lot of activities take place. This is to ensure satisfactory dealings among the stakeholders in the channel of distribution. As a way to achieving the aforementioned, the distribution channel members perform the following functions.

1) Marketing Information; information from the producer is usually past to other channel members through intermediaries. Such information rangers from the ones emanating from the consumer's that requires producers attention or from the producer to the consumers. Example consumers complain on the low quality of products or increase in price of products sold to them. Producers explanation on increase in price appreciation of consumers to buy substitute goods supplied to them in absence of the usual ones they purchase with reasons are another practical examples.

2) Storage Function; the producer in most cases do not have enough accommodation or provision with regards to the storage, preservation and warehousing of goods which they produce. Channel intermediaries such as wholesalers, distributors and retailers take charge of the storage, preservation and warehousing of goods which they procure from the producers until the time they are needed by buyers. This allows the producer to concentrate on production aspect and makes it possible for evenly availability of goods during harvest all seasons of plenty and lean seasons of the year. However, some producers still combine production and the above mentioned functions performed by the wholesalers and retailers.

3) Transportation function; the channel members such as producers, wholesalers and manufacturers are involved in the movement or transportation of goods from initial place of production or processing to a place of need and consumption or end use. This may entail moving goods internally within a country or across national boundaries. The availability of goods produced far away from our locality in our shops or the ones produced outside our country is a result of this transportation function. Ehikwe (2002:307), in support of this stated, that the impact of distribution on product availability to consumers has been enhanced with the spirit of cooperation to consumers collaboration among the world communities, formation of economic blocs and improvement on methods of production.

4) Finance Function; this involves the pre financing of the production or even the sales of the goods and services found in the shop and market places. Financial well-to-do channel members, such as wholesalers and retailers take the responsibility of financing the production of the goods they require, if the producer of such goods have not got the fund needed to embark on the production of the goods. In order perceptive such channel member can grant credit sales of their goods and services to buyers. This makes it possible for the financially weak buyers who wish to obtain such goods to be in possession of the goods at the time they required the goods.

5) Bulk Breaking; this involves buying in large quantity and selling in smaller units. A good number of middlemen such as wholesalers and wealthy retailers buy foods in bulk and sell them in smaller quantities. This is largely to meet with the forms preferred by the ultimate consumer or other buyers.

6) Assortment Function;  the wholesalers and retailers collect different types of products from different producers and make them available to their customers. This offers Both the buyers and producers some advantages. Evans and berman 1982 supported this, and hold that it makes it possible for those producers and manufacturers who due to cost consideration restrict themselves to the production of just one type of product, to have their products offered to buyers along with those of their counterparts, thereby facilitating easy comparisons of these products, joint purchase of complementary products and quicker sales turnover that results from the attractiveness of increased productivity or assortment. Moreover, buyers are offered the opportunity to choose from a variety of product and to make their purchases under a roof. Example, buyers of such complementary products such as tea, milk and sugar, do buy these items if they are sold in one store. This is because it is economically cheap to buy all of them under a particular store.

Other Channel Function Are;

a) the collection of widely scattered goods.

b) increasing buyer's standard of living )through export and import promotion).

c) risk bearing, et c.

The utilities created by distribution according to johnson 2008 213 are form utility, place utility, time utility and ownership utility.