Republic of uzbekistan andijan machine-building institute fundamentals of business management

Need for a Distribution Channel 
In earlier economic exchanges, people bartered goods and services. if two people have something 
that each other needs, they agree on how much of each item should be exchanged, and a trade is 
made. For example, a jar of apples may be exchanged for 1 yard of cloth. The distribution process 
was therefore simple. In a complex economy, exchanges are more complex due to the various 
differences between producers and buyers. 
• 
Quantity differences. 
Businesses produce and sell large quantities of each product to many customers. Each customer 
needs a very small amount of the product at the same time. 
• 
Differences in assortment. Businesses produce one type of specialty product, while 
customers want different products. 
• 
Differences in places 
In today's global economy, producers and buyers are often separated by thousands of miles. 
Businesses may wish to distribute their content to different countries.end of page 246 
• 
Time differences 
Businessthey achieve efficiency by producing large quantities of products at the same time. Some 
agricultural products can be produced only at a certain time of the year. Consumers may want to 
buy them at a time other than when the products are manufactured. 
Distribution channels are created to accommodate these differences. Effective distribution 
channels get the product produced in large quantities and get it to the customers in the right amount. 
The channel collects a large number of products from manufacturers to offer products at convenient 
locations for customers. Channels of distribution hold the product for as long as customers want 
to buy it.Channels and channel members Businesses that participate in distribution channels are 
known as channel members. All marketing functions and activities are carried out through channel 
members or buyers. Businesses join distribution channels when neither channel members nor 
customers want to do the marketing, or when the business can do it better or at a lower cost. 
Channels can be both direct and indirect. In the direct distribution channel, the product goes 
directly from the producer to the consumer and no organization intervenes. An indirect distribution 
channel involves one or more businesses between a producer and a consumer. These other 
businesses perform one or more marketing functions. Indirect distribution channel wholesale 

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may include trade. wholesalers stand between manufacturers and retailers. They divide 
manufacturers' bulk products into small batches, repackage them, and redistribute them to retailers 
and other home sellers. Wholesalers who own a reputable name or product are called merchant 
wholesalers. Another type of wholesaler that does not have the authority (name) is called agents 
or brokers. 
Retail.Retailers are a well-known and important part of the consumer product distribution channel. 
Retailers are the latest organization in the indirect distribution channel. Retailers offer a variety of 
products to consumers in convenient locations. They help consumers choose the best solution. 
They can provide financing and delivery services. They may even offer repairs and other services. 
Retailers help manufacturers store, display, and advertise products, and often pay for the product 
before the end customer buys it. Check it out. 
What is the difference between direct and indirect methods of 
distribution? Evaluation. 
Identify the correct answer. 
1. 
Which of the following results in a lower price than a higher price? 
a) 
High customer demand 
b) 
A large amount of useful information 
c) 
Non-competitive solutions. 
d) 
All with low cost benefits 
2. When firms are based on the production of a specific type of product, it is necessary to adapt 
the method of distribution in .... 
a) 
set the floor 
b) 
place 
c) 
different 
d) 
size 
Creates an academic bond 
3 Mathematics. Visit the online catalog of the shopping complex or Internet business, clarify the 
5 questions, determine the sale price and the real price. Prepare a table with the product, actual 
price, and selling price. 
Calculate the recorded volume and percentage to determine the sales volume of the 5 products at 
the actual or selling price. The total amount in dollars and the percentage of the actual price is quite 
large 
4 Search. 7 marketing functionswrite .Use the Internet in the first function on your list of business 
direction or business placement. Choose an indirect method of business transfer. Do this as a 
function.