Research On The Transformation Of Circulation Channels

The circulation channel functions as the carrier of the practice of circulation economics to transfer the commodity from the production area to the consumption area and impacts greatly the development of the economics of circulation. This paper first reviews in theory the fundamental notions, structures, behavior and the evolution process of circulation channels. In this paper, circulation channel refers to the channel through which commodity is transferred by means of value or goods from the production area to the consumption area. Here the circulation channel is very close to the "marketing channel", but in a strict sense, they are different in terms of the research perspective and scope in that the marketing channel is only the sub-branch of the former disciplinary. This paper focuses on the circulation channel structure and circulation channel behavior as far as the theory of circulation channel is concerned. Based on the comprehensive review of the theory of circulation channel structure, this paper explores the theories of circulation channel, flat structure, cubic structure, and the latest circulation channel structure. Attempts are made to research on the behavior of circulation channel. Theories of power, cooperation, and conflicts in the distribution channel are discussed. Then the paper elaborates on the distribution channel transformation. Special efforts are made to discuss strategic relation and diagonal channels.To answer the question "why to reform", the paper explores the cause in terms of demand, efficiency, competition, and environment, and proposes that demand for consumption is the outset of the distribution channel as well as the end of the channel. Any change in quantity and structure of consumer demand will result in corresponding changes in the structure and behavior of the distribution channel. As it can reflect the function and utility of the specified system in a specific period, efficiency has become the driving force to initiate the reform in the distribution channel. Competition is the basic phenomenon in the market economy. Competition that occurs in the different departments in the distribution channel will inevitably lead to reform of the holistic structure, quantity and relations of the distribution channel. Environment is the settings for survival of the distribution channel as well as the constraints for the development of the distribution channel in terms of politics, economy, population and technology. Changes in environment will stimulate the reform in the distribution channel.To answer "how to reform the distribution channel", the paper then proposes electronizaton, strategic alliance and differentiation. Electronization is due to becomethe trend of the circulation channel structure. Strategic alliance, a new notion of cooperation and competition, will replace the traditional relationship between the transaction partners in the circulation channel. Differentiation is oriented to the individual behavior of the circulation channel agents, ?the firm, the wholesaler, the retailer and consumers. A correct understanding of the differentiation of the channel agents will help better predict the trend of the individual behaviors of the circulation channels.In the last part of the paper, studies are made to research the particularity of the Chinese circulation channels, which, after a relatively long period of evolution, are now market-oriented instead of plan-oriented. However, compared with the developed countries, China still lags behind in terms of the circulation channel. Rigid notions, out-of-order market, low efficiency and backward technology have greatly hindered the development of the Chinese circulation channels. The 21st century provides both challenges and opportunities to the Chinese circulation channels. With the advent of the Internet technology, electronization has penetrated in the circulation channel. In addition to the US, the rest of the world are all at the starting line and this provides us with a good opportunity to catch up with the...