A distribution channel consists of a group of people and firms that are involved in the transfer or transport of a title to a product as the product moves from the producer to the consumer or business user. An efficient and successful distribution channel makes the correct quantities of the right products that are available in the right place at the right time to satisfy the target customer base. A well-organized distribution channel also reduces the cost of marketing and the expenses of acquiring the product.
International trade is centered in the capital city of Sri Lanka, with more than 90 percent of all import and export channels passing through the port of Colombo. While there are countless small to medium importers, about 20 to 30 fairly large firms manage the bulk of international traffic. As is the case, only a few importers handle distribution networks elsewhere in Sri Lanka and the majority of them just wholesale directly to regional distributors or to retailers. Although the government’s position on trade and distribution has decreased, government agencies recently involved themselves in importing some food items due to shortages and price inflations.
Factors affecting choice of Distribution & Sales channels
- The geographic concentration
- Type of market
- The size of the order
- The number of potential customers
Designing distribution channels- Objectives to be accomplished
- Satisfy all the requirements of the customer base by providing excellent and competent levels of service
- Increase the availability of products or services to potential customers.
- Increase cost- effectiveness of good or services offered
- Ensure effective promotional efforts
- Maintain flexibility
- Acquire timely and comprehensive market information.