Channels of Distribution

=Channel distribution is the path that a product takes from the producer to the consumer and physical distribution is the actual movement of products that path.

Distribution channels are organized in several ways: conventional, vertical, horizontal and multichannel (Kern R. 2013). Some of these organizational methods are more structured than others. When a distribution channel deals with more than one independent producer, such as wholesalers and retailers, the channel is known as a conventional distribution channel. (Kern R. 2013) These channels are not normally known to be strong and typically don’t give the customer the quality of product that they deserve. In a vertical marketing system, the retailers, wholesalers and producers, join forces to create a unified front, promoting an individual product (Kern R. 2013). Vertical distribution channels are stronger than the conventional distribution channels because all of the companies involved carry some of the load of power. (Kern R. 2013) In a horizontal distribution channel, companies join up and combine all of their finances and resources, in order to take on more than one company or product (Kern R. 2013). A multichannel distribution channel is where a large corporation uses two or more marketing channels to better target their desired customer segments (Kern R.

As mentioned in an earlier assignment, there are three main types of distribution channels. The first is the channel that goes from the producer, then to the wholesaler, then to the retailer or sells to the consumer. The second channel starts with the producer who sells straight to the retailer, who then sells to the consumer. The third channel goes directly from the producer to the consumer. Channels one and two are classed as indirect marketing channels, whereas channel three is a direct marketing channel as it goes straight from producer to consumer.

Distribution has is closely dependent to that target market. Breezy’s Leather Goods distribution is going to target locally, in Downtown Wilmington, North Carolina. Therefore, the distribution channel will start as a local retail store in the Art & Antique district. Breezy’s will maintain strong well-known local distribution, but eventually expand its distribution to other areas of North Carolina. This will make Breezy’s products have more a statewide distribution. However, the ultimate goal is to make products available online where locals and people nationwide will have access to Breezy’s Leather Goods. This type of distribution is known as direct distribution. Direct distribution is where the vendor is the owner and manages all of the company’s resources in the value

Tanner and Raymond(2010) refer channel of distribution as ‘the chain of intermediaries a product passes through from producer to final consumer’.Rufus & Coco will use both direct and indirect channels of for the distribution of KYON .

Distribution channel should be picked up carefully depending on the what type up business we are in, what stage we are in business, what kind of maturity does a market has in that particular country etc. Distribution channel could be somehow complex due to the traditional market split into mass market and specialist market channel. Some countries are more into wholesale dealing while some are more into discount shops like supermarkets, wine shops etc.

For example, consider Figure D, in which we have the videocassette tape manufacturer selling through a wholesaler, who in turn sells to retailers, who then sell to the public. Each of the three members of the channel of distribution(manufacturer, wholesaler, retailer) performs a function and is compensated for it by the margin it receives.

Channels may have different specialities by nature on some product or pricing strategies. Then, complementing eachother can be hard for them.

There is also another strategy called distribution channel A group that associate organizations and individuals that delivering products or services to final customers. Distribution channels which link the goods, producers and customers to each other. In addition, Intermediaries form the components of the distribution channel. There are two different types of distributors; general distributors provide a variety of different goods and services to different geographic

Having a limited distribution channel further allows for the manufacturer to pay more attention to its channel partners, which allows for the partners to become more efficient at distributing product. When a channel partner is more efficient, the ultimate goal of profitability for the manufacturer and channel partner thus is met. Ten times out of ten a product distributor will go with the partnership that guarantees it profitability over one that doesn’t.

* The markets where the product is going to be served needed to be elaborately planned. The company decides on all the retail outlets and web portals where the product is going to be available. The company also defines its distribution channels and networks. The dealer commissions are negotiated and fixed. The dealers are made aware of the specifications and features of the product.

Among the least understood areas of business is the complex grouping of institutions referred to as the distribution

Bert (1998) explains that the best channel that any manufacturer should prioritize on is one that makes the end product user happiest, so that they are always willing to buy again the same product from the same channel member. So it’s up to the manufacturer to select a marketing channel that best serves the interests of the customer.

Another channel strategy according to Jobber (2001) is the intensity of the distribution channel. According to Kotler (2000) and Fein and Anderson (1997) companies have to decide on the number of intermediaries to use at each channel level. Three approaches are available: intensive distribution, selective distribution and exclusive distribution. Mallen (1996) states that intensive distribution is at one end of the scale where the policy is to distribute to as many outlets as possible, and that exclusive distribution is at the other end of the scale, where the policy is to distribute only to one intermediary at a given level in a given geographic area. The broad middle ground is normally referred to as selective distribution.

It is imperative for a business to effectively be able to reach out to both its customers and its potential customers in order to be successful. In order for this to occur, companies must develop and utilize the both individuals and groups to deliver the direct flow of products from those producing and providing to the company’s customer base (Pride, 2014). Marketing channels serve many facets and angles through its successive formation and provide the company with the ability to make products available to customers when and where they are needed, and in the exact amounts that they are needed (Pride, 2014). Marketing channels are also most useful tools for management because it is useful in a company’s development and establishment of an effective marketing strategy.