4. Reaching the purpose of the dis tributor in studying the product and in studying the market is first, to discover the possibilities open to him, and second, to aid him in his solution of the prob lems relating to the third trade factor—the methods of reaching the desired market. All the previous study of the campaign leads up to the study of trade channels and marketing methods. Adding machines, for instance, are usually sold direct by the manufac turer to the consumer because the nature of the prod uct is such that middlemen could not, or would not, give it sufficiently careful study to enable them to de velop the necessary market. The farm papers are the chief mediums for mail-order advertisements because the market for mail-order houses is chiefly found in rural communities that are relatively inaccessible to completely stocked specialty stores. Heavy staples like sugar, flour, etc., are usually sold thru jobbers be cause their bulk is too great to permit the average retailer to purchase in sufficient quantities to justify direct relations with the manufacturer. These ex amples illustrate the connection between the product, the market and the methods that are selected to reach the market. The three great trade factors are linked together. The study of any one of them alone leads the distributor to no result; the careful study of them all is likely to lead him to success.
5. Trade channels are the routes along which goods pass on their way from the.manu facturer to the final consumer. If the route is direct and without branches and intersections, we have the manufacturer-direct-to-consumer selling method. If there are several routes leading from the production center, and if each of these direct routes branches off at some distributing point where new routes' radiate to the final markets, we have the selling method that utilizes one class of middlemen—possibly the manu facturer-retailer-consumer method, or the manufac turer-agent-consumer method. And if these branch routes, each in turn, come to smaller distributing cen ters where new routes reach out into the surrounding country, we have still another complication in our trade channels—the manufacturer-jobber-retailer consumer selling method.
The problem of distribution is constantly becom ing more diflicult of solution. In former times trade channels were definitely established, and the manu facturer had little choice of selling methods. Each class of distributors occupied a fixed place in the chain of distribution, and there were but few attempts to open new lines of contact between the manufac turer and the final market. Competition was not so keen as it is today. Fewer people, proportionately, were engaged in mercantile pursuits. The business acumen of former industrial leaders was devoted to the exploitation of new countries rather than to the intensive development of a market as yet uncrowded.
The power of advertising as a force in business was little appreciated, and it had scarcely begun to exer cise its far-reaching influence on the long-established traditions of marketing. Under these conditions, the problem of selling was a comparatively simple one. The manufacturer had but to adopt the usual trade channels, and there was little tendency to question the necessity or the value of the services rendered b y the distributor.
6. New difficulties of marketing.—Today condi tions are altered. There is little respect for tradi tional methods. Every manufacturer and every dis tributor seeks the largest possible market at the least possible cost, and he consciously selects the trade channel and the selling methods that are best suited to his particular case, without regard to prevailing cus toms unless he deems them expedient or profitable. Intense competition makes it necessary for the man who has something to sell to cultivate relatively unim portant markets that he would have disdained in the old days, to regard with desire every profit that goes into the pocket of anyone who stands between him and the consumer, and to submit to searching analysis every process, every link in the chain of distribution, every method of marketing, in order that be may have the maximum advantage over his competitors in price, in service and in profits.
7. Old chain, of distiibution.—For many years many manufactured products passed thru a series of trade channels that were dictated by a market organi zation based on six stages. These stages were: (1) Manufacturer, (2) Commission merchant, (3) Jobber, (4) Wholesaler, (5) Retailer, (6) Consumer.
This traditional chain of distribution is not un known today. In some of the textile trades, for in stance, we still find all these links in the chain, and many more besides. There are so many steps in handling some kinds of textiles on their way from the manufacturer to the consumer that it is often difficult to trace and chart them. This condition, however, is not typical of modern marketing. Many circum stances have combined to obviate the former necessity for a long string of profit-taking middlemen. Ad vertising has brought the manufacturer and con sumer close together; increased consumer demand for fresh styles has necessitated the shortening of the chain; quickened methods of transportation have ren dered unnecessary the long, graduated series of ware housemen formerly needed in order to give the con sumer the goods when Ile wanted them. These, and other developments, have operated in most industries to break down the traditional chain of distribution and to substitute for it one composed of fewer links.