MM 5.02 Channels of Distribution

The goal of channels of distribution is to move products from producers to

• intermediaries

• final consumers

• industrial distributors

• middlemen

Channels of distribution benefit consumers by

• making a variety of products available to them

• lowering the prices of all consumer products

• raising the quality of all consumer products

• increasing profits for businesses

Channels of distribution benefit businesses by

• lowering the prices of all industrial goods

• getting their products to consumers more efficiently

• raising their profits each year

• allowing them to avoid all channel tasks

Providing marketing information is an important channel activity. Businesses rely on marketing information to determine

• how intermediaries are performing

• how much to charge for their products

• what to name their products

• their target markets' needs and wants

The costs of promoting products are often

• avoidable in certain channels.

• very inexpensive, especially for new products.

• paid for entirely by one channel member.

• shared by channel members.

Retailers perform an important channel activity by negotiating with consumers on issues
such as

• risk-taking.

• promotion.

• delivery.

• manufacturing.

A wholesaler breaks down a large shipment of a product and sells portions of it to several retailers. The wholesaler is reducing a discrepancy of

• quantity

• installation

• assortment

• promotion

A retailer buys a variety of toys from a number of different producers and makes them all available for sale in the same place. The retailer is reducing a discrepancy of

• quantity

• installation

• assortment

• promotion

Channels of distribution allow channel members to share

• profits

• risk

• equipment

• employees

Channel members add value to a product by

• performing certain channel activities expertly

• making the product more costly

• making the product difficult for consumers to find

• pursuing individual goals