Distribution channels are the link between producers and customers. It s acknowledged that effectiveness of marketing depends among other factors, on marking the product available at the right places and at the right time at the minimum possible cost.

A distribution channel is defined as “the path traced in the direct and indirect transfer of title to a product as it moves from a producer to the ultimate consumer or industrial users. “A distribution channel, in other words, is a set of firms and individuals that take title, or assist in transferring title to the particular goods or service as it moves from the producer to the consumers. Channels of distribution consist of two categories of intermediaries or middlemen, namely,

i. Merchants who take title to the goods,
ii. Agents who do not take title to the goods but assist in the transferring of the title.

Each member of a channel is a link in a distribution network of organizations that extends from the producer to the users of products and services. Though it is found the some firms perform all channel functions, typically several organizations are linked together in a distribution channel to carry out the various activates including storage, transportation, sales contract, service, sorting and re-packing.

The channels of distribution available in a country depend on its stage of economic development. It can be concluded that:

•    The more developed countries have more levels of distribution, more specialty stores and supermarkets, more department stores and more store sin the rural areas.

•    The influence of the foreign agents declines with economic development.

•    The manufacturer-wholesaler- retailer functions become separated with increasing economic developing.

•    Financing function of wholesalers decline and wholesale markets increase with increasing development.

•    The number of small stores declines and the size of the average store increases with increasing development.

•    Retail margins improve with increasing economic development.

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