Purpose and content of

Classified in Economy

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SET 3A) A channel of distribution is the complete sequence of marketing organizations involved in bringing a product from the producer to the consumer. Its purpose is to make possible transfer of ownership and/or possession of the product. A basic channel of distribution consisting of the manufacturer, the wholesaler, the retailer, and the ultimate consumer. Each of these four engages in a transaction that involves movement of the physical good and/or a transfer of title (ownership) of that


A manufacturer is an organization that recognizes a consumer need and produces a product from raw

materials, components parts, or labour to satisfy that need.

A wholesaler is an organization that serves as an intermediary between manufacturer and retailer to

facilitate the transfer of products or the exchange of title to those products, or an organization that sells

products to manufacturers or institutions that resell the products (sometimes in another form).

A retailer is an organization that sells products it has obtained from a manufacturer or wholesaler to the

ultimate consumer. Retailers neither produce nor consume the product.

The ultimate consumer is the individual who buys or uses the product for personal consumption.

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