What is a Channel of Distribution

The process and partners that move a product from the producer to the customer.



Distribution Channel Structure

Channel Structure: The number of levels and companies involved in the flow of product from producer to end user

•Direct Channels: Manufacturer to Customer
-Provide full control over the execution of marketing strategy and a performance benchmark for indirect channels
  Company sales force
  Company web site
  Company owned retail outlets

Distribution Channel Structure

•Indirect Channels:
- rely on intermediaries
- provide amount/variety assortments for customers
- provide service and other facilitating functions
- communicate with other end users
•Contact efficiencies
- Cybermediaries
•Delegate based on core competencies, functions, and costs of distribution and logistics

Distribution Channel Structure
•Hybrid, Dual, or Concurrent Channels: a combination of direct and indirect channel structures



Sources of Sales / Marketing Conflict

•Economic friction
•Cultural differences
- “Thought-worlds”
- Salespeople: customers, short-term
- Marketing: products, long-term
•Differences between the two in orientation/competences:
- Negatively related to cross-functional collaboration, but
- Positively related to firm performance!

Direct Channels

Sales Over Company Website

•Brick & Click Distribution Model:
- Company-direct Website in addition to traditional offline channels
•A variety of factors must be considered before going to this model including:
- Backlash from existing channels
  Cannibalize
- Disintermediation
- Core competencies and costs




Last modified: Wednesday, May 26, 2021, 12:38 PM