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The Role and Characteristics of Distribution

The Role and Characteristics of Distribution

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Product Description

Distribution channels


Distribution is one of the important sales methods of enterprises, especially in the process of internationalization of enterprises. When enterprises have the necessary information on foreign markets, but they are not prepared to invest large amounts of money into unfamiliar markets, the distribution model can be lower. The cost helps the company to quickly understand and develop foreign markets. The essence of distribution is cooperation, mutual benefit and win-win, the company has product resources, the distribution channel has customer resources and the asymmetric understanding of the market, and this product resource is married with the sales channel. If the model can establish a higher degree of fit, the company can even adopt the distribution cooperation model as its own sales model for a long time. How to establish and maintain the distribution channel suitable for its own development strategy will be an important part of the enterprise marketing strategy.


The basic methods of distribution include: sales agents; franchising; chain operations; distribution; zero channel marketing.
First, the sales agent:
1. Products enter a certain market faster and test the market demand.
Applicable to itself is not as familiar with the local market as agents, sales agents are more familiar with local sales channels and social customs, so it is easier to enter and expand the market than manufacturers.
Using agents to conduct market experiments, if the sales situation is not good, you can quickly transfer the investment. If the sales volume shows that the market potential is quite large, you can also end the agency relationship and sell it by your own marketing agency.
2. Reduce market risk and reduce sales costs.
3. Reduce the number of transactions and strengthen after-sales service.
Second, franchise:
1. The risk of business failure is reduced.
Investors who apply to their own lack of business experience require the franchise enterprise to have a complete management and distribution system to ensure the smooth operation of the entire enterprise.
2. The recipients usually receive national brand image support.
3. Share the scale Benefits and reduce the opening costs.
Third, chain marketing:
1. All the same capital, operating similar goods and services, centralized management leadership by the same headquarters, and jointly organized retail sales of business activities.
2. Saving circulation costs.
3. Have the scale advantage of research, development, training and learning.
Fourth, distribution:
It has a wide range of application, and it adopts an intermediary that specifies a specific company to trade its products. The two parties clarify the contract and stipulate that the original manufacturer will continue to sell certain products of the intermediary.
Wholesalers and retailers by sales target
Five, zero channel marketing:
Zero-channel sales is a system of interaction with marketing that uses one or more advertising media to influence transactions and measurable responses across regions.


Distribution function
The basic function of the distribution channel is to realize the transfer of products from producers to consumers. But there are also other features. The main functions of distribution channels are:
1. Investigation and research: refers to the collection and collation of information about current consumers and potential consumers, direct competitors, substitute competitors, other participants and other aspects of the marketing environment, and timely distribution to the distribution channels. Other members pass relevant information to share information within the channel.
2. Promotion: Channel members can use the various means of promotion, through various promotional means, to convey information about products or services to consumers in an attractive form to consumers, stimulate consumer desires and facilitate transactions. success. For example, new product exhibitions, seasonal promotions and other ways.
3. Negotiation: This function refers to the final agreement between members of the distribution channel to negotiate the price and other relevant conditions in order to transfer the ownership of the goods.
4. Arrangement: This function refers to the members of the distribution channel sorting and sorting the goods according to the buyer's requirements, such as changing the package size and grading according to the product classification.
5. Ordering: This function refers to the reverse communication behavior of the distribution channel members to the manufacturer with the intention to purchase.
6. Logistics: It means that the product enters the distribution process from the offline, at this time, the distribution channel has to undertake the transportation and storage functions of the product entity.
7. Financing: This function refers to the collection and distribution of funds by members of the distribution channel to cover the expenses required for channel work, including: construction and operation of distribution channels, payment of employee wages, transfer of loans between channel members, implementation of consumer credit, etc. Wait.
8. Risk-taking: While sharing the benefits, members of the distribution channel must share the various risks brought about by various uncontrollable factors such as commodity sales and market fluctuations.
In short, channels play more and more functions in today's market competition. Which function is used by these channel members depends on the actual situation. When the manufacturer performs these functions, the cost of the manufacturer increases, and the price of the product also rises. When the intermediary performs these functions, the cost and price of the manufacturer decrease, but the intermediary must increase the cost to bear the cost.

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Product Categories : Marketing And Distribution > Marketing And Distribution

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