Understanding the Market — Entrepreneurship STD 11 Commerce — Question

Common methods are as follows:

1. Direct Channels/ Zero-level: Here, the producers supply the products direct to the consumers. The producer, here either supplies directly to the consumer or through its retail outlets, for example Single Bakery, frontier biscuits, bata shoe company, etc.

Producer → Consumer.

1. Indirect Channels: Here, the producers supply their products through one or more intermediaries. Following are the types of indirect channels,

1. Producer-Retailer-Consumer (One level channel): Producer sells the product to retailer, who in turn sells to the consumer, for example producers of refrigerators, washing machines, etc.

Producer → Retailer → Consumer.

2. Producer-Wholesaler-Retailer-Consumer (Two level channels): Here, two intermediaries, viz. the wholesaler and retailer are involved between the producer and the consumer, for example sugar, soaps, ghee, grains, etc.

Producer → Wholesaler → Retailer → Consumer.

3. Producer-Agent-Wholesaler-Retailer-Consumer (Three level channels): Here the producers take the help of agents who, in turn, supply to wholesalers and then through the retailers, the goods ultimately reach the consumers. Hindustan Levers appoints the agents or distributors who sell both to the wholesalers and retailers for onward distribution to consumers.

Producer → Agent → Wholesaler → Retailer → Consumer.