UNIT -10
HOME TRADE AND CHANNELS OF DISTRIBUTION
10.2 HOME TRADE AND DISTRIBUTION SYSTEM :-
• Home Trade :-
→ When the exchange (sale and purchase) of goods takes place within the boundaries of a country, is known as home trade.
→ It is also called domestic trade.
• Distribution System :-
→ The system which is concerned with the movement of goods from the point of production to the point of cosusmption may be called distribution system.
→ Functions of a distribution system as follows :-
(1) Buying and Assembling
(2) Standar disation and Grading
(3) Branding
(4) Packing and Packaging
10.3 WHAT IS A CHANNEL OF DISTRIBUTION? :-
→ The term 'Channel of Disrtibution' refers to the route taken by goods as they flow from the producer to the consumer.
→ The channel of distribution is a network of instituations that perform a variety of interrelated and coordinated fucntions in the movement of goods from producers to consumers.
10.4 FUCNTIONS OF CHANNELS OF DISTRIBUTION :-
(1) Transactional Functions :-
→ Functions necessary to a transaction of the goods are called transactional fucntions.
(2) Logistical Functions :-
→ The fucntions involved in the physical exchange of goods are called logistical fucntions.
(3) Facilitating Functions :-
→ These fucntions facilitate both the transaction as well as physical exchange of goods.
10.5 CHANNELS OF DISTRIBUTION USED :-
→ Channels of distribution ar classified into :
(1) Direct Channels :-
→ When the producers sell their goods directly to the consumers it is called a direct channel.
(2) Indirect Channels :-
→ When goods are supplied by middle men like wholesaler, retailer and agents, etc is known as indirect channels.
10.6 FACTORS INFLUENCING THE CHOICE OF CHANNEL :-
(1) Distribution policy.
(2) Characteristics of the prodcut.
(3) The target customers in view.
(4) Supply characteristics.
(5) Types of middle men in the field.
(6) Channel competition.
(7) Potential volume of sales.
(8) Losts of distribution
(9) Profits expected in the long-run.
10.7 TYPES OF MIDDLEMEN :-
→ Middlemen act as links between the prodcuers or dealers of goods and the consumers.
→ They are divided into :-
(1) Fuctional Middlemen :-
→ Those who undertake various marketing fucntions in the process of distribution of goods withour having ownership rights are called fuctional middlemen.
→ Functional middlemen are classified into :-
(1) Factors
(2) Brokers
(3) Commission agent
(4) Auctioneers
(2) Merchant Middlemen :-
→ Middlemen who act on their own right bying and sellilng goods at a profit, are called merchant middleman or merchants.
→ Merchant middlemen are divided into :-
(1) Wholesale traders.
(2) Retail traders
10.8 ROLE OF MIDDLEMEN :-
(1) Provide local convenience to consumers
(2) Provide field stocks
(3) Financing
(4) Servicing
(5) Acting as channels of communication
(6) Help in promotion
