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  1. Meaning of Distribution
  2. Channels or Chains of distribution
  3. Functions of each of the channel of distribution

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Meaning of Distribution

Distribution is the process by which goods produced are made to reach the final consumer.  It includes the totality of activities that occur between the time when goods are produced and when they reach the final consumer. These activities could be packaging, warehousing, transportation, etc.

Channels or Chains of Distribution

These are routes or sequence through which goods move from the manufacturer to the consumer.  This is illustrated below:

Functions of The Channels of Distribution

The Producer

The producer is the person who manufactures goods or provides services to satisfy consumers’ need

Functions of the Producer

  1. He ensures that the goods produced or services rendered suit the consumer.
  2. He advertises his goods and services to enhance patronage
  3. He offers after sales service to customers

The Wholesaler

This is an intermediary who buys in large quantities from the manufacturer and sells in small quantities to the retailer.

Functions of the Wholesaler

  1. He buys in bulk from the producer.
  2. Sells in small quantities to the retailer
  3. Gives useful information about the market to the producer so that he can adjust his production to meet consumers’ needs
  4. Allows the retailer to buy on credit.
  5. Finances the producer by making prompt or advance payment
  6. Packages and brands the goods for the producer.
  7. Provides warehousing facilities for the goods of the manufacturer.
  8. Advertises the goods for the manufacturer.
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