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Key Functions of Distribution Channels In Marketing

This post will give you an idea about the major functions of Distribution Channels in marketing. It is also known as Marketing channels or Physical distribution channels.

Distribution channels, whether physical or digital, plays a very important role in the growth of the business and hence understanding of functions is essential for both marketer and future marketer i.e. management students.

Let’s understand various key functions of these marketing channels.


  • Storage
  • Reduces Transportation
  • A Complete Advantage
  • Balancing Demand Vs. Supply
  • Place Utility

Inventory Management

  • Transit stock/pipeline inventory
  • Cycle stock
  • Safety stock (buffer inventory)
  • Anticipation inventory
  • Smoothing inventories
  • Hedge inventories


  • Identifying Transportation Requirements
  • Chose Transportation Mix of different modes
  • Routing
  • Planning of the System
  • Implementation
  • Control of Cost

Order Processing

  • Set of Processes of –
  • Receiving
  • Handling
  • Ordering Promptly and accurately
  • Billing
  • Granting Credit
  • Preparing Invoice
  • Collecting Due

Material Handling

  • Selecting the Proper equipment
  • Minimising Breakage
  • Maintenance
  • Take care of Spoilage or theft

Other Functions

  • Information & Customer Education
  • Selling
  • Financing
  • Promoting
  • Negotiating
  • Marketing Intelligence
  • Servicing

This is all about Functions of Physical Distribution Channels in Marketing.