distribution channels

(noun)

Distribution of products takes place by means of channels. Channels are sets of interdependent organizations (intermediaries) involved in making the product available for consumption.

Related Terms

  • lobbyist

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?
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