pharmaceutical industry

Topics: Supply chain, Marketing, Distribution Pages: 2 (523 words) Published: July 27, 2014
CHAPTER 3: DISTRIBUTION CHANNEL’S OVERVIEW

3.1 DEFINITION:
A distribution channel is the method a company uses to get its products into the marketplace for consumer use. The traditional channel goes from supplier, manufacturer, distributor, wholesaler and retailer.

Two types of distribution channel:
The indirect channel is used by companies who do not sell their goods directly to consumers. Suppliers and manufacturers typically use indirect channel because they exist early in the supply chain. Depending on the industry and product, direct distribution channel have become more prevalent because of the Internet. The direct channel is where a company sells its products direct to consumers. The Internet has greatly increased the use of the direct channel while it was not popular many years ago. Additionally, companies may cut costs and avoid risks by using the direct channel.

3.2 THE ROLE OF DISTRIBUTION CHANNEL:
Distribution channel plays an important role in bringing products from the manufacturer to retailers and consumers. Distribution system has become an effective competition tool in the long-term segment of the company. It reduces the complication of bringing products to the market and enhances the company’s reputation. Besides, it also meets the customer expectations in terms of quantity and type of products; time and place; the quality of the services and the price that customers are acceptable. Distribution strengthen cooperation among individuals and organizations working in the field of production and distribution of consumption in general purpose, offering products and services for consumers as well as satisfying the goals of each party.

3.3 THE FUNCTION OF DISTRIBUTION CHANNEL:
A channel of distribution performs the work of moving goods and services form producers to customers. The distribution channel of a company performs many following key functions: Information: gathering and distributing market research

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