Manufacturers must be able to sell their goods to customers in order to make the real aim of a business profit. This is achieved by sending their goods through various channels of distribution. This paper will discuss the article written by Ken Rolnick titled "Managing channels of distribution".
Rolnick starts the article by describing channels of distribution as "one of the hottest areas in marketing and sales today". According to Rolnick managing channels of distribution supplies a much needed source of knowledge and expertise that professionals can rely on. Based on case studies and real life experience, the article explains the complexities of managing multiple channels of distributors, dealers, manufacturers, and private labels. In the process, Rolnick explores both macro and micro business influences that affect channel effectiveness. Special attention is paid to the frustrating areas of channel power and conflict, the dangerous issues of legalities, and the most critical topic of all: the channel design sequence.
On his article Rolnick explains that each channel includes the same activities: as well as the act of buying and selling, the product will be promoted at various stages of distribution, stored then transported down to the next stage. A manufacturer may sell directly to the customer, and exclude both wholesaler and retailer. Some manufacturers for example, many China producers run factory shops from which their products can be bought. Variations on the manufacturer-direct-to customer's channel include the door to door selling of products (Avon cosmetics and Betterware are well known examples) and mail order selling through agents (who carry out some of the retailer's duties).
The article also uses another example to describe the importance of channels of distribution; where the retailer is excluded, and the wholesaler receiving the goods from the manufacturer sells them directly to the final consumer. These...