The distribution channel in marketing serves as a set of process where it’s necessary to transfer the ownership of goods from one point of production to the point of utilization by its consumers and therefore, a distribution channel is a useful tool in marketing.
The role of Conventional Distribution has well thought-out traditional approach where you are literally pushing your desired product to the target market. According to Philip Kotler, a Conventional Distribution channel is comprised of one or more independent producers, wholesalers and retailers where each of them has a separate business that aims to maximize profit even at the cost of the profit for the whole system.
The Conventional Distribution Channel is mostly used for all the consumer products from clothing to groceries .This channel proceeds from a manufacturer who works on the supply chain to distribute the products all across the country’s course of action. The part of a manufacturer’s job is to pay a huge amount of money to the media in order to advertize its products. Moreover, the products are passed on through the supply chain to wholesalers or distributers. The task of the wholesaler/distributer is to take all the products in larger quantities so as to increase their efficiency. The wholesaler is basically an intermediary between the retailer and the producer; however some have their own outlets so that’s how consumers can buy directly from the wholesalers as well. The wholesaler may break the bulk into smaller quantities and transfer it to the individual retailers. As similar to any communication channel, a conventional channel also requires the customer point of purchase such as retail stores, wholesalers etc that is based on the consumer buying pattern on the product’s targeted buyers. The retailer can also buy directly from the manufacturer, wholesalers and sells them to the consumers. The advantage of the retailer is that they are able to buy in bulk size and if their customer loyalty is strong which is an attractive proposal for the brands that they stock.
A change in Conventional Distribution Channel is also observed when the product could not reach to the target market or the shifts in distribution channels due to retail store closings.
[large]In a Conventional Distribution Channel, the intermediaries are able to operate at different channels to find out a way for the product to move from its manufacturer to its target consumers. The intermediary acts as a retailer who provides a physical environment for the consumer to analyze and purchase the product. Similarly, the intermediary can also be a wholesaler providing the target materials directly to the retailer.
A basic drawback is encountered in the Conventional Distribution Channel during the economic downturn, where it can cause instability in the relationship between the manufacturers- intermediaries. For instance, if the product gets failed to sell at any level, the wholesaler, retailer or distributer may further decide to discontinue the product. The manufacture has to be flexible at such time in order to alleviate the risk of selling a new product in the market. Another major reason is the conflict between the channel members which can lead to disruption during the whole distribution process. Due to this there are many famous large companies who are now adopting integrated channels (vertical/horizontal distribution system).