Facilitates searching process

Facilitates process of exchange by making the products or services available for use

Standardizing transactions which makes exchange more effective and efficient

Why Distribution Channel?Why Distribution Channel?

Adjust the discrepancy of assortment through the performance of sorting process

Breaking Heterogeneous supply into separate stocks which are relatively homogenous called ‘sorting out’

Bringing similar stocks from a number of sources together into a larger homogenous supply called ‘accumulation’

Breaking a homogenous supply into smaller and smaller lots called ‘allocation’

Building up of assortment of products for resale in association with each other called ‘assortment’

Why Distribution Channel?Why Distribution Channel?

Discrepancies between typical production activity and consumption activity

Spatial Discrepancy Temporal Discrepancy Need for breaking the bulk Need for assortment Information Discrepancy

Activities of Distribution Activities of Distribution ChannelChannel

Physical possession flow Ownership flow Promotion flow Information flow Financing Flow

Channel FlowsChannel Flows

Cost of performance

Criticality of Performance

Value addition

Ideal Channel DesignIdeal Channel Design

Selection Training Motivation

Coercive power Reward power Legitimate power Expert power Referent power

Channel Management Channel Management DecisionsDecisions