Question -
Answer -
The term channels of distribution refers the facilitate to the movement of goods and services and their title between the point of production and point of consumption, by performing a variety of marketing activities. Following are the functions performed by the channels of distribution
(i) Accumulation
It aims at holding the stock to match between the consumer demand and supply condition, warehousing helps in maintaining continuous flow of goods and services.
(ii) Promotion
The marketing channels also help in promoting the demand for the product by displaying demonstrating and participating in various promotional activities organised by the producers.
(iii) Negotiating
The marketing channels are the intermediaries between the producers and the consumers. They attempt to reach final agreement on price and other terms of the offer, so that transfer of ownership is properly affected.
(iv) Risk Taking
Risk taking is the basic responsibility of the intermediaries. It may arise out of physical deteriorations, changes in price levels, natural calamities, change in fashion etc. These are unaviodable as they hold sufficiently large and variety of inventories till the sale of stock.
(v) Grading/Sorting
Grading is the process whereby they sort the products on the basis of different sizes, qualities, moisture contents and so on. It helps us realising the time value for the product and at the same time ultimate consumer feels satisfied with the uniform quality of the product.
(vi) Packaging
The products are packed in the small tradable lots for the convenience of the consumer.
(vii) Assembling/Assortment
Marketing channels aim at satisfying the needs of the customers. The products desired by the consumer may not be available in the market. They procure such goods from different sources, assemble or assort them as per the requirements of the consumers.