Function Distribution Channels

The main function is to distribute goods distribution channels from producer to consumer, then the company in implementing and determining the distribution channels have to do a good consideration.
As for the functions of distribution channels according to Kotler (1997: 531-532) are:

• Information, which collects important information about customers and competitors to plan and assist the exchange.
• Promotion, development and dissemination of persuasive communications about the products offered.
• Negotiation, which is trying to agree on a price and other terms, thus allowing the transfer of ownership rights.
• Ordering, namely the distributor to order the goods to the company.
• Payment, namely the buyer to the seller to pay bills through a bank or other financial institution.
• Title, namely transfer of ownership of goods from an organization or person to the organization / others.
• Physical possession, namely transport and store goods from raw materials to finished goods and ultimately to the final consumer.
• Financing, namely request and utilize the funds for expenses incurred in the work of distribution channels.
• Risk Taking, which bear the risks associated with the implementation of the work of distribution channels.

Factors that drive a company uses distributors, are:
- The manufacturer or a small company with limited financial resources are not able to develop a direct sales organization.
- The distributor appears to be more effective in wholesales sales since the scale of their operations by retailers and expertise in particular.
- The manufacturers who simply prefer to use a model of their funds for expansion rather than to conduct promotional activities.
- Retailers who sell a lot often prefer to buy all sorts of goods from a wholesaler rather than buying directly from each manufacturer.