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Principles of Marketing - Philip Kotler

Functions of distribution channel

Distribution channel - is the way in which goods move from producers to consumers. Thanks to him, removed the long gaps in time, location and ownership, separating the goods and services from those who would like to take advantage of them. Members of the distribution channel have a number of very important funktsiy2.

1. Research work - collecting information necessary for planning and facilitating the exchange.

2. Sales promotion - the creation and dissemination of persuasive communications about the product.

3. Networking - establishing and maintaining communication with potential buyers.

4. Adaptation of the goods - the goods fit the requirements of buyers. This applies to activities such as the production, sorting, assembling and packing.

5. Negotiations - attempts to harmonize prices and other conditions for the subsequent implementation of the transfer of ownership or possession of the act.

6. The movement of goods - transportation and warehousing of goods.

7. Financing - the search for and use of funds to cover the costs of operation of the channel.

8. The adoption of a risk - taking responsibility for the operation of the channel.

Implementation of the first five functions contributes to the conclusion of transactions, and the remaining three - the completion of transactions already concluded.

The question is not whether these functions to be performed - it is necessary, and be sure - but rather who should carry them out. All these features are inherent in three general properties: they absorb scarce resources, can often be made better through specialization, can be carried out by different members of the channel. If some of them carries a manufacturer, its costs are rising accordingly, and, therefore, prices should be higher. When transmitting portion mediators cost functions, and hence the price of the manufacturer below. Intermediaries in this case, have to charge an additional fee to cover its costs for the organization of work. The question of who should perform a variety of functions inherent in the channel - it is, in fact, the question of the relative effectiveness and efficiency. If you will be able to more effectively perform the functions of the channel respectively reconstructed.