Channel of Distribution for a Pencil

The means by which merchandise is transferred from the manufacturer to the consumer, also referred to as the end user, is referred to as the chain of distribution. These channels vary in the number of levels and complexity depending on the nature of the goods involved. The simplest distribution channel is made up consist of two levels and is used where the producers sell directly to the end user without involving intermediaries. There are also goods that require a longer channel of distribution to reach the consumers. Here, intermediaries are often very critical. In such channels of distribution, goods may move from the producer to the retailer before finally reaching the consumer. In certain cases, a fourth intermediary would be introduced, the wholesaler who would fall between the producer and the retailer.

A number of factors may influence the type of distribution channel for a product. One such factor is the nature of the product. Technical goods usually call for the involvement of specialist distributers while for customized goods, direct distribution would always yield the best results. The nature of the market would also influence the choice of the distribution channel. Producers must consider the size of the market and its geographical distribution when designing the most suitable channel of distribution. Other factors that are usually considered when the suitable channel of distribution is to be determined include the size of the business itself, its marketing objectives and its established distribution network. The manufacturers must also factor in the legal issues central to the process of distribution.

In determining the most suitable channel of distribution for a product such as a pencil, it is important that the above mentioned factors are considered. Because pencils are meant to be sold in both local and international markets, the choice of distribution channel is very important to the producers. Pencil producing companies may opt to use their agents or wholesalers to access markets located abroad. They can also use the same intermediaries to access the local market. These wholesalers would sell the products to the retailers who would then break the bulk, selling to the consumers in smaller quantities.