Marketing Distribution Channel

2287 WordsMay 11, 201110 Pages
At the present time, with the development of economy, in order to make large profits, a growing number of enterprises pay much more attention on choosing distribution channels. Keegan and Schlegelmich (2001) explained that distribution channel can be considered as the method which is used for enterprises putting products into the market for consumers to use. The traditional distribution channel goes from supplier, manufacturer, distributor, wholesaler and retailer (Frazier, 1999). Indirect and direct are two different types of distribution channels (Wilkinson, 2001). According to Silva (2008), “Well-chosen channels constitute a significant competitive advantage, while poorly conceived or chosen channels can doom even a superior product or…show more content…
According to the above information, generally, direct distribution channel is used when the goods is large scale and complex. Because the company needs to reduce the cost which is spent during the distribution channels. In contrast, some other products, such as mobile phone, the company often choose indirect distribution channel. In this way, they shorten the channel of distribution. Therefore, the product can reach to consumer for use fast and make more profits. The large number of population in a nation could influence the choice of distribution channels, because in order to reach consumer the channel members may be required to use a lot (ibid). In addition, Coughlan et al (2001) explained that costs must always be reduced in order to increase the pure profits. Fazier (1999) also noted that costs spend on different channels affecting costs of goods and services differently, “which also affects the margins demanded by the channel members thus increasing the price of products that pass through those channels”. Regulatory issues can be considered as another fact which impacts the choice of distribution channels. For example, in China the administration of network is not perfect enough, when online store is used, company should think about the government policies and the media in China also can be made use of. When companies consider the channels of distribution, the
Open Document