distribution channels

Examples of distribution channels in the following topics:

• Channel Member Characteristics

  • To maximize sales, a company must carefully consider the fit between its products and the available distribution channels.
  • Marketers must carefully evaluate how their products fit into different distribution channels.
  • It is important for a company to match its products with the characteristics of the distribution channel.
  • Candy uses an intensive distribution channel, meaning it is widely available at a low cost.
  • Explain the importance of pairing a brand's products with the appropriate distribution channel

• Distribution and logistics

  • Distribution channels are the means by which goods are distributed from the manufacturer to the end user.
  • Essentially there are three channel links between the seller and buyer.
  • The first link is the seller's headquarters organization, which is responsible for supervising the channel, and acts as part of the channel itself.
  • Channels between countries represent the second link.
  • Finally, the third link is the channel structure (logistics) within countries, which distributes the products from their point of entry to the final consumer.

• Competitive Priorities in Marketing Channels

  • An alternative term is distribution channel or 'route-to-market'.
  • Cost, flexibility and quick adaptation to changing markets and demand are usually the top factors sellers consider when assess and choosing distribution channels.
  • These distribution types include:
  • Intensive distribution - this channel allows the producer's products to be stocked in major, mainstream outlets.
  • Exclusive distribution - producers select only very few intermediaries.

• Types of Marketing Channels

  • There are basically 4 types of marketing channels: direct selling; selling through intermediaries; dual distribution; and reverse channels.
  • A marketing channel where intermediaries such as wholesalers and retailers are utilized to make a product available to the customer is called an indirect channel.
  • Dual distribution describes a wide variety of marketing arrangements by which the manufacturer or wholesalers uses more than one channel simultaneously to reach the end user.
  • Using two or more channels to attract the same target market can sometimes lead to channel conflict.
  • An example of dual distribution is business format franchising, where the franchisors, license the operation of some of its units to franchisees while simultaneously owning and operating some units themselves.

• The Significance of Marketing Channels

  • The primary purpose of any channel of distribution is to bridge the gap between the producer of a product and its user.
  • The primary purpose of any channel of distribution is to bridge the gap between the producer of a product and the user of it, whether the parties are located in the same community or in different countries thousands of miles apart.
  • The channel of distribution is defined as the most efficient and effective manner in which to place a product into the hands of the customer.
  • Banks have responded by developing bank-by-mail, Automatic Teller Machines (ATMs), and other distribution systems.
  • Even performing arts employ distribution channels.

• Channels for Consumer Goods

  • With the growth of specialization, particularly industrial specialization, and with improvements in methods of transportation and communication, channels of distribution have become very complex.
  • Thus, corn grown in Illinois may be processed into corn chips in West Texas, which are then distributed throughout the United States.
  • Channels don't always make sense.
  • Finally, channels should have certain distribution objectives guiding their activities.
  • The structure and management of the marketing channel is thus in part a function of a firm's distribution objective.

• Factors Affecting Channel Choice

  • Other channel members can be useful to the producer in designing the product, packaging it, pricing it, promoting it, and distributing it through the most effective channels.
  • Achieve a pattern of distribution - structure the channel in order to achieve certain time, place, and form utilities.
  • After the distribution objectives are set, it is appropriate to determine the specific distribution tasks or functions to be performed in that channel system.
  • An ability to do this requires the channel manager to evaluate all phases of the distribution network.
  • Managers have many factors to consider when choosing a product distribution channel.

• Channels for Industrial Goods

  • With the growth of specialization, particularly industrial specialization, and with improvements in methods of transportation and communication, channels of distribution became very complex.
  • Thus, corn grown in Illinois may be processed into corn chips in West Texas, which are then distributed throughout the United States.
  • This definition implies several important characteristics of the channel.
  • This channel of distribution is commonly used to market accessory equipment, such as typewriters or operating supplies which include typewriting papers, pens, and office materials.
  • This trade channel is feasible when agents cannot directly sell to industrial users.

• Customer Expectations

  • Members of a channel of a distribution are also customers of those elsewhere in the channel, and their expectations must also be met.
  • It is important to remember that a channel of distribution may be made up of organizations, but those organizations are made up of people.
  • Ideally, a channel member should coordinate their efforts with other members in such a way that the performance of the total distribution system is enhanced.
  • By ensuring there are no leadership issues and by tackling the human element of the channel of distribution, expectations of the channel members can be effectively met.
  • This distributor is a part of a channel of distribution, who must both meet expectations of its customers, as well as have its own expectations met.

• Selecting Marketing Channels

  • In intensive distribution (such as candy) the manufacturer attempts to get as many intermediaries of a particular type as possible to carry the product
  • Once the number of levels is decided, the channel manager must determine the actual number of channel components involved at each level.
  • How many retailers and wholesalers in a particular market should be included in the distribution network?
  • The objective is to gather enough information to have a general understanding of the distribution tasks these intermediaries perform.
  • Given the restrictions inherent in channel leadership, the final question is always "who should lead the channel?