DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : A.Srinivas Kumar
Designation : Senior lecturer
Branch : DCCP
Institution : Government polytechnic for
women, Nandigama
Year/semester : I year
Subject code : Ccp-104
Topic : Distribution network
Duration : 50 mts.
Sub topic : Indirect channels of distribution
Teaching aids : PPTs
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Objectives

On completion of period, you would be able to

know:
 Define the Indirect channel
 List different types of indirect channels

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Recap

In the previous class, we discussed about

 Advantages of channels of
distribution
 Reasons for channels of distribution
 Central theme of the channels of
distribution

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Indirect channel

 In indirect channel the manufacturer

does not sell the goods to the consumer
directly, instead he sells goods to the
middlemen
 The middlemen in turn sell the goods to
the consumers

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Different types of indirect channels

A) Producer-Retailer-Consumer :

Producer Retailer Consumer

 Under this method the producer’s by-pass the

wholesalers and deal directly with the retailers

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Different types of indirect channels

 It has become possible to bypass the

wholesalers due to modern means of transport
and communication, growth of retailers,
advanced system of automatic data processing
 This channel is often used for consumer
durables like refrigerators, televisions, ready
made garments, shoes etc.,
 It is also used for product of high value goods.
Ex:- automobile equipment

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b) Producer-Wholesaler-Retailer-Consumer

Producer Wholesaler Retailer Consumer

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b) Producer-Wholesaler-Retailer-Consumer

 This is a traditional channel for distribution of

goods
 Small retailers and producers find this
method most useful, economical and
convenient when markets are widely
scattered
 The producer sells the goods to the
wholesaler, who in turn, sells to the retailers
 The retailers, in turn sell the goods to the
ultimate consumers
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b) Producer-Wholesaler-Retailer-Consumer
 This channel is suitable where the producer
has limited finances
 If the product line is narrow, wholesalers
have specialized knowledge and provide
strong promotional support to the
manufacturers
 This channel is used for consumer durable
products which are not subjected to
changes in fashion

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c) Producer-wholesaler-consumer

Producer Wholesaler Consumer

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c) Producer-wholesaler-consumer

 In this channel the retailers are eliminated

 The producers sells the goods to the
wholesalers, who in turn sale to the
consumers
 It is widely used where there are large and
institutional buyers in the market. Ex.
Hospitals, educational institutions etc.,

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d) Producer-agent-retailer-consumer

Producer Agent Retailer Consumer

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d) Producer-agent-retailer-consumer

 In this channel, an agent middlemen relieves

the producer from marketing tasks
 Agents are common in distribution of textiles
and agricultural products

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a) Producer-agent-wholesaler-retailer-

consumer

Whole- Consumer
Producer Agent Retailer
saler

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Producer-agent-wholesaler-retailer- consumer

 This is the longest route of distribution

 It is highly useful when the producer wants to be
fully relieved of the problem of distribution
 The producer hands over his entire output to the
sole selling agent who sells his goods to the
wholesalers
 The wholesaler sells the goods to the small
retailers and who in turn sells them to the
consumers
 This type of trade channel is very popular in
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agricultural market
Summary
In this lesson we have learned that
 In indirect channel the manufacturer does not sell
the goods to the consumer directly, instead he
sells goods to the middlemen
 There are different types of indirect channels
 Producer-Retailer-Consumer
 Producer-Wholesaler-Retailer-Consumer
 Producer-wholesaler-consumer
 Producer-agent-retailer-consumer
 Producer-agent-wholesaler-retailer-consumer
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Frequently asked questions

1. What is the meaning of indirect channel ?

2. What are the different types of indirect
channels ?

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