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questions :Classification of distribution chennal?
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[Member (365WT)]answers [Chinese ]Time :2019-07-05
Because Chinese individual consumers are different from the main products consumed by producer groups, the purpose of consumption and the characteristics of purchase are different. Objectively, the sales channels of Chinese enterprises constitute two basic modes: the sales channel mode of enterprises to producer groups. And business-to-individual consumer sales channel models.

1. The sales channel model of enterprises for productive group users. There are the following types: producers - users, producers - retailers - users, producers - wholesalers - users, producers - wholesalers - retailers - users, producers - agents Merchant--Wholesaler--Retailer--User
2. Business-to-individual sales channel model. There are the following types: producers - consumers, producers - retailers - consumers, producers - wholesalers - retailers - consumers, producers - agents - retailers - Consumers, producers--agents--wholesalers--retailers--consumers

According to the presence or absence of intermediaries to participate in the exchange activities, all the channels in the above two modes can be classified into two types of the most basic sales channels: direct distribution channels and indirect distribution channels. Indirect channels are divided into short channels and long channels.

(1) Direct distribution channels

Direct distribution channels refer to producers who supply products directly to consumers or users without the involvement of intermediaries.
The form of direct distribution channels is: producer-user. Direct channels are the main type of industrial distribution. For example, large-scale equipment, special tools, and technically complex products that require specialized services are all directly distributed, and some of the consumer products also use direct distribution types, such as fresh goods. In recent years, especially since 1988, the proportion of self-sales has increased significantly. For example, in 1990, China's steel products sold by steel mills accounted for 38% of the country's total steel production; only 20.20% of automobiles were supplied and sold under the mandatory plan.

1. The specific way of direct distribution channels

There are many ways for enterprises to directly distribute, but they are summarized as follows:
(1) Order distribution. It means that the production enterprise and the user first sign a purchase and sale contract or agreement, and supply the goods according to the terms of the contract within the prescribed time. In general, most of the active parties are sales producers (such as manufacturers to send sales), but also some popular products or tight raw materials, spare parts, etc. by the user to find goods.

(2) Sales from the sales department. It refers to the place where the production company usually sets up the sales department outside the production area and the users are concentrated. There are also some manufacturers close to the user or business district to set up the sales department in front of the factory.

(3) Joint distribution. For example, between industrial and commercial enterprises and between production enterprises, sales are carried out.

2. Advantages and disadvantages of direct distribution channels
(1) Advantages of direct distribution channels:

1 Conducive to the communication between the production and the needs of both parties, can be produced on demand, to better meet the needs of target customers. Because it is face-to-face sales, users can better grasp the performance, characteristics and usage of the products; producers can directly understand the characteristics of users, purchases and other characteristics and trends, and then understand the strengths and weaknesses of competitors and their marketing environment. The changes have created conditions for on-demand production.

2 can reduce the loss of the product during the circulation process. By removing the intermediate links of commodity circulation, sales losses are reduced, and sometimes the circulation of goods can be accelerated.
3 can make both buyers and sellers relatively stable in marketing. Generally speaking, the direct sales channel exchanges goods and signs contracts. The quantity, time, price, quality and service are all fulfilled in accordance with the contract. The relationship between the purchase and sale parties is fixed in the form of law for a certain period of time, so that both parties can use their energy. Strategic planning in other areas.

4 can be directly promoted during the sales process. Direct distribution of enterprises is actually a direct promotion activity. For example, the company's direct sales of staff not only promotes the user's order, but also expands the influence of the company and products in the market, and promotes the ordering of new users.

(2) Disadvantages of direct distribution channels:
1 In terms of products and target customers: For most of the living materials, the purchase is small, diverse and repetitive. If producers rely on their own strength to set up sales outlets, they often fail to do so or even backfire. It is difficult to make products widely distributed in the short term. It is difficult to quickly occupy or consolidate the market. The needs of corporate target customers are not met in time, and they are bound to shift. The direction to buy products from other manufacturers means that the company loses its target customers and market share.
2 In terms of business collaboration partners: Commercial enterprises have more experience in sales than production companies. These middlemen understand the customer's needs and purchasing habits best, and play an indispensable role in the business flow. The production enterprises sell their own products, they have dismantled this bridge, and they are bound to conduct market research on their own, and they have taken over the expenses of people, property and materials that the middlemen are responsible for. In this way, the workload of the producer is increased and the energy of the producer is dispersed. More importantly, producers will lose the cooperation of middlemen in sales, the realization of product value has added new difficulties, and the needs of target customers are difficult to meet in time.
3 Between producers and producers: When producers only sell goods through direct distribution channels, so that the target customers' needs are not met in time, the peer producers may enter the target market and take away the target customers and commodities. Collaboration partners. In the production group market, the target customers of the company are often the productive users who purchase the products of the company. They are often the partners of the company's professional collaboration. Therefore, losing the target customers means losing the cooperation partners..When the exchange of scientific technology and management experience between producers is hindered, it will make the company more difficult in the journey of professional collaboration, which in turn affects the company's product market share and business collaboration, resulting in a a bad cycle...
(2) Indirect distribution channels

Indirect distribution channels refer to the use of intermediaries to supply goods to consumers or users, and intermediaries involved in exchange activities.
The typical form of indirect distribution channels is: producers--wholesalers--retailers--individual consumers (a few are group users)? At this stage, the total demand for consumer goods and market potential in China is large, and the market for most commodities is positive. Gradually transformed from the seller's market to the buyer's market. At the same time, for the sales of living materials, the proportion of market regulation has increased significantly, and the collaboration between industrial and commercial enterprises has become increasingly widespread and close. Therefore, how to use indirect channels to widely distribute their products has become one of the important topics studied by modern enterprises in marketing.

1. The specific way of indirect distribution channels
With the opening of the market and the invigoration of circulation, China’s proportion of indirect distribution of goods has increased. There are many ways for companies to sell through middlemen in the market, such as factory store hooks, special distribution, retailers or wholesalers directly from the factory, and middlemen to organize various trade fairs for the factory, so I will not list and elaborate them here. .

2. Advantages and disadvantages of indirect distribution channels

(1) Advantages of indirect distribution channels:
1 helps the product to be widely distributed. Intermediaries are connected to producers at the beginning of commodity circulation, and connected to consumers at their end points, thus helping to regulate the contradiction between production and consumption in terms of variety, quantity, time and space. It is not only conducive to meeting the needs of the target customers of the manufacturer, but also conducive to the realization of the value of the product of the production enterprise. It can also make the products widely distributed, consolidate the existing target market and expand the new market.
2 to alleviate the shortage of producers, people, wealth, and other forces. The middlemen bought the producer's products and delivered the money, which enabled the producers to realize the value of the products ahead of time and start a new capital cycle and production process. In addition, the middlemen also bear the costs of warehousing, transportation, etc. in the sales process, and also bear other human and material resources, which makes up for the lack of power in producer marketing.
3 indirect promotion. Consumers often buy goods after shopping for a few, and an intermediary usually sells similar products from many manufacturers. Intermediaries have different introductions and promotion of similar products, which have a great impact on product sales. In addition, the stronger middlemen can also pay a certain amount of advertising and advertising, and have certain after-sales service capabilities. Therefore, if the producer can obtain good cooperation with the middleman, it can promote the sales of the product and obtain the market information from the middlemen in time.
4 It is conducive to the professional cooperation between enterprises. The increasingly socialization of modern machinery and industrial production and the rapid advancement of science and technology have made the specialization of labor more and more sophisticated. Only by extensive professional cooperation can enterprises better meet new technologies. The challenge of new materials can withstand the severe test of the market, and it can be produced in large quantities and efficiently. The middlemen are the product of professional and coordinated development. The producers and sellers are in one, which makes it difficult to effectively organize the circulation of goods and make Production energy dispersion.With the cooperation of middlemen, producers can free themselves from the cumbersome sales business, concentrate on production, concentrate on technical research and technological innovation, and promote professional cooperation among production enterprises to improve the efficiency of production and operation...
(2) Disadvantages of indirect distribution channels:

1 may form a "demand lag". The purchase of a product by an intermediary does not mean that the product is sold out from the middleman, and sales may be blocked. For a producer, once the sales of most of its intermediaries are blocked, a "demand lag" is formed, that is, the demand lags behind the supply in time or space. However, the scale of production is fixed, and personnel, machinery, and funds are still operating as usual, and production is difficult to reduce. When demand continues to decrease, it will lead to more supply than demand. If a similar situation occurs in most commodities, it will cause a so-called market weakness.
2 may increase the burden on consumers, leading to resistance. The circulation link increases the loss of goods in storage or transportation. If they are passed on to the price, it will increase the burden on consumers. In addition, the poor service of the middlemen may lead to the customer's resistance to the goods and even the transfer of the purchase.
3 It is not convenient to communicate information directly. If the cooperation with the middlemen is not good, it is difficult for the production enterprise to understand and grasp the opinions of the consumers on the products, the situation of the competitors' products, the advantages and disadvantages of the enterprises and competitors, the changing trend of the target market conditions, etc. from the sales of the middlemen. . In today's volatile and information-exploding market, corporate information is not working, production and management will inevitably lose direction, and it is difficult to maintain high marketing efficiency.

(3) Long channels and short channels

The length of the distribution channel is generally divided according to the number of circulation links, including the following four layers:
1. The zero-level channel (MC) is directly from the manufacturer to the consumer.
2. The primary channel (MRC) is the manufacturer through the retailer to the consumer.
3. Secondary channels
That is, manufacturers - wholesalers - retailers - consumers, more common in consumer goods distribution. Or a manufacturer-agent-retailer-consumer. More common in consumer goods distribution.
4. Three-level channels
Manufacturers - Agents - Wholesalers - Retailers - Consumers. It can be seen that the zero-level channel is the shortest and the third-level channel is the longest.

(4) Wide channels and narrow channels
The narrowness of the channel depends on how many intermediaries of the same type are used in each link of the channel. There are many similar middlemen used by enterprises, and the products are widely distributed in the market, which is called wide channel. Such as general consumer goods (towels, toothbrushes, water bottles, etc.), distributed by a number of wholesalers, and resold to more retailers, can reach a large number of consumers, and sell products in large quantities. Enterprises use less of the same type of intermediary, narrow distribution channels, called narrow channels, it is generally suitable for professional products, or expensive and durable consumer goods, a middle-level business package, several distribution. It makes it easy for manufacturers to control distribution, but market distribution is limited.

(5) Single channel and multiple channels
When all products of the company are sold by the sales department directly set by themselves, or all of them are distributed to wholesalers, they are called single channels. Multi-channels may be direct channels in the region, indirect channels in the field, exclusive distribution in some regions, and multiple distributions in other regions; long channels for the consumer goods market and short channels for the production materials market.
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