KCSE ONLINE

Esoma Online Revision Resources

Chain of Distribution - Business Studies Form 3

Background

The following are intermediaries used to distribute goods to final consumers.

Intermediaries

These are institutions, businesses or individuals involved in the distribution between manufacturers or producers and the final consumers. They are also known as agents or middlepersons in the distribution channel. They include the following: wholesalers, retailers, agents, marketing boards and co-operatives.

Examples of intermediaries


Various channels of distribution: -
Different products will have different channels of distribution depending on their nature and their use. The common channels of distribution are:

A farmer picking coffee beans

Distribution of locally produced goods

Locally produced goods could be agricultural or manufactured; their distribution will depend on several factors such as nature of goods and their market.

Distribution of locally manufactured goods

The following chart illustrates the distribution of locally manufactured goods.

The following are channels of distribution of locally manufactured produced goods.

I. The local manufacturers can distribute their products directly to local consumers.

II. The local manufacturers can sell their products through local wholesalers who then sell to local retailers and local retailers sell to local consumers.

III. The local manufacturers can sell to local government agents who sell to the local retailers and local retailers sell to local consumers.

IV. The local manufacturers can sell to local government agents who sells to the local wholesalers and finally to local consumers.

 

Distribution of locally agricultural goods

In the distribution of the local agricultural products the nature of the products is of utmost importance. If the products are perishable, it is important that they reach the consumers as fast as possible. The following chart illustrates the distribution of locally produced agricultural goods.

Distribution of locally produced agricultural goods

The following are the channels of distribution of locally produced agricultural products:

I. The consumer buys goods directly from the farmer.

II. A retailer may get the produce from different farmers and sell them to the consumers.

III. A farmer supplies the produce to the wholesaler. The wholesaler then sells the produce to the retailer, who sells them to the consumers.

IV. Farmers in one locality may come together to form a co-operative society.The farmers then sell their produce to the co-operative society who inturn sells the produce to the retailer, who sells them to the consumers.

V. The farmers then sell their produce to their co-operative society which then sells the produce to the marketing boards.The marketing boards then sell them to the consumers after processing it.

VI. Marketing boards buy the produce directly from the farmer. The marketing boards then sell to the wholesaler who in turn sells to the retailer and the retailers then sell to the final consumer.


Distribution of imported goods

Imported goods originate from other countries and are brought into a country for sale to local consumers. Since the products come from outside the country, they go through distribution channels that are different from the ones used for locally produced goods. The following chart of Kenya illustrates goods imported.

Distribution of imported goods

Imported goods

Distribution of imported agricultural goods.

Imported agricultural goods go through various channels. The following chart shows various channels of distribution of imported agricultural goods.

The following are the channels of distribution of imported agriculural goods.

I. Foreign farmers can sell directly to local consumers.

II. Foreign farmers {producers} selling goods through appointed local agents who in turn sell to local wholesalers. The local wholesalers then sell to the local retailers who sell to the local consumers.

III. Foreign farmers {producers} sell to local wholesalers. The local wholesalers then sell to the local retailers who sell to the local consumers.

IV. Foreign farmers {producers} sell to local manufacturing agents who in turn sell to local retailers who sell to the local consumers.

The following chart shows examples of imported agricultural goods.

Agricultural goods


Distribution of imported manufactured products

The following chart illustrates various channels of distribution of imported manufactured products.

The following channels may be used to distribute imported manufactured goods.

I. Foreign producers sell goods to local consumers.

II. Foreign producers sell goods to local agent who in turn sells to local wholesalers then to the local retailers and finally to the local consumers.

III. Foreign producers sell goods to local wholesalers then to the local retailers and finally to the local consumers.

IV. Foreign producers sell goods to local wholesalers and finally to the local consumers.

V. Foreign producers sell goods to local manufacturer's representatives who in turn sells to the local retailers and finally to the local consumers.

The role of intermediaries in the chain of distribution

Provision of storage: they provide warehousing services for storage of goods.

Breaking bulk ; they undertake the breaking of bulk, packaging and re-packaging into smaller and convenient units for sale to consumers and other middlepersons.

Provision of distribution and transportation
; they provide the physical transfer and transportation of goods to various destination.


Marketing and sales

They carry out product promotion and look for markets to sell goods.


Sharing production risks ; they share risks involved in production by producers by taking over distribution risks.

Preparing goods for sale -where necessary they carry out various activities such as sorting, branding, grading and packing to make the goods ready for sale.



 




Order this CD Today to Experience the Full Multimedia State of the Art Technology!

For Best results INSTALL Adobe Flash Player Version 16 to play the interactive content in your computer. Test the Sample e-Content link below to find out if you have Adobe Flash in your computer.

Sample Coursework e-Content CD

Other Goodies for KCSE ONLINE Members!

Coursework e-Content CD covers all the topics for a particular class per year and costs 1200/- ( Per Subject per Class ).

Purchase Online and have the CD sent to your nearest Parcel Service. Pay the amount to Patrick 0721806317 by M-PESA then provide your address for delivery of the Parcel. Alternatively, you can use BUY GOODS TILL NUMBER 827208 Ask for clarification if you get stuck.

Install ADOBE Flash Player for Best Results

For Best results INSTALL Adobe Flash Player Version 16 to play the interactive content in your computer. Test the link below to find out if you have Adobe Flash in your computer.

Search

Subject Menu