Distribution Channels Overview

A group of independent organizations that collaborate to make a product or service accessible to customers.

Intermediaries help reduce costs by efficiently matching supply with demand.

Providing product information to customers, retailers, and other channel members.

Promoting a product to customers, retailers, and other channel members.

Establishing contact with potential customers and buyers.

Matching customer needs and wants with available products and services.

Negotiating prices and terms of sale with customers and other channel members.

Moving products physically from manufacturers to customers.

Providing financial assistance to buyers and channel members.

Taking on the risk associated with owning and selling products.

Each level of intermediaries involved in moving a product closer to the final customer.

A distribution channel with no intermediaries between the producer and the customer.

A distribution channel with one or more intermediaries between the producer and the customer.

The physical movement of products through the channel.

The transfer of ownership of products from one member of the channel to another.

The movement of payments for products through the channel.

The exchange of information between channel members, including customer data, sales figures, and market trends.

The communication of promotional messages about products to customers, retailers, and other channel members.

Disagreements between channel members regarding goals or roles.

Conflicts between organizations at the same level of the channel.

Conflicts between organizations at different levels of the channel.

A distribution system where producers, wholesalers, and retailers work together under a unified channel strategy.

A VMS where one company owns all the levels in the distribution channel.

A VMS where independent companies at different levels of the channel coordinate their activities through contractual agreements.

A type of contractual VMS where wholesalers form a group to offer shared marketing programs and distribution.

A type of contractual VMS where retailers form a group to buy products and manage operations jointly.

A type of contractual VMS where a franchisor grants rights to independent businesses to sell their products or services.

A franchise where a manufacturer licenses retailers to sell their products.

A franchise where a manufacturer licenses wholesalers to sell their products to retailers.

A franchise where a service firm licenses retailers to offer their services.

A VMS where a dominant company coordinates channel activities through its power and influence, without formal agreements.

A channel arrangement involving two or more companies at the same level joining forces to exploit a new marketing opportunity.

Using multiple distribution channels to reach different customer segments.

The process of removing intermediaries from a marketing channel.

Understanding the level of service customers expect and what they are willing to pay for.

Defining clear objectives for the distribution channel and identifying limitations.

Exploring different types of intermediaries and how they can be integrated into the channel.

Evaluating the economic factors, control challenges, and adaptability of different channel alternatives.