The distribution channels are the different entities that intervene in the business structure and marketing of a product. Its objective is to ensure that the product is transferred from the factory to the final consumer.
The distribution channel of a product is formed by individuals or companies that are responsible for their physical transfer and ownership without modifying it. Because when this happens, then a new product is born.
So, for an intermediary to be considered as a product channel, he must acquire his property from the manufacturer or intermediary (channel), and then sell it to another or to the final consumer.
The distribution system can include participants or primary channels (wholesalers or retailers). Specialized participants can also take part.
This includes transport companies, cargo agents, storages, commission agents and marketers of the product. The distribution channel is one of the four components of the marketing system, along with the product, the price and the market or place.
Index
- 1 Types of distribution channels and their characteristics
- 1.1 Consumer goods channels
- 1.2 Channels for distribution of industrial goods
- 1.3 Distribution channels services
- 1.4 Multiple channels of distribution or dual distribution
- 1.5 Non-traditional channels
- 1.6 Inverse channels
- 2 Examples of distribution channels
- 2.1 Direct channel
- 2.2 Retailer channel
- 2.3 Wholesale channel
- 2.4 Double
- 3 References
Types of distribution channels and their characteristics
The distribution channels can be classified as:
Consumer goods channels
In turn these are divided into:
Direct channel
It is the one that goes from the producer to the consumer. This channel is the simplest and most immediate channel to distribute consumer goods, as it does not involve intermediaries.
Retailer channel
The distribution follows the producer - retail - consumer scheme. It includes the large supermarket chains and warehouses.
It is the most visible channel for the final consumer. Frequently, purchases involving the general public are made through this channel.
Wholesale channel
The distribution is made according to the scheme: producer-wholesaler-retailer-consumer. The distribution of medicinal, hardware and food products is done using this channel.
High demand goods are generally distributed through these channels. This makes it possible for manufacturers to cover the entire market.
Agent channel / broker
Follow the pattern producer - agent - retailer - consumer. Instead of using the wholesalers channel, producers prefer to incorporate intermediaries or commission agents to get their products to the retail market.
The products are generally sold to large retailers. This scheme is very frequent in the distribution chains of perishable food and oil.
Double channel
The sale of the product from the producer to the consumer is made following the scheme: manufacturer - agent / broker - wholesaler - retailer - consumer.
Manufacturers sometimes turn to intermediary agents. These, in turn, employ wholesalers who sell to large chain stores or small stores.
Channels for distribution of industrial goods
This class of channels distributes raw materials and other products whose final consumers are other companies that use them in the manufacture of new products.
The distribution of industrial products is different from the distribution of consumer products. Four channels are used in this type of distribution.
Direct channel (Producer - industrial user)
It is the most usual for the acquisition of products for industrial use, since it is the shortest and most direct.
This channel includes manufacturers that buy large volumes of raw materials, supplies, equipment or processed materials from other manufacturers.
Manufacturers or producers use their own sales force to market and sell their products.
Industrial distributor
Follow the scheme producer - industrial distributor - industrial user. Manufacturers use industrial distributors as intermediaries to sell to their customers. An example of this is the manufacturers of air conditioners.
Agent channel / broker
The intermediary can be the producer, the agent or the industrial user. It is a very useful channel for companies that do not have their own sales department.
Channel agent / intermediary - industrial distributor
Here the intermediary can be an industrial distributor, the producer, the agent or the industrial user. This type of channel is used when the sales scheme does not allow the industrial user to sell directly.
Distribution channels services
Due to the nature of the services provided, these channels originate varied special distribution needs.
Producer - consumer
The intangibility of the services provided requires personal contacts between the manufacturer / producer and the consumer. This occurs both in the production process and in the derivative sale activity.
Such is the case of a medical or legal consultation, an electric service, among others.
Producer - agent - consumer
Here, personal contact between the producer and the consumer is not necessarily required to comply with the distribution of the service. Then, the agent or intermediary enters as an active part.
For example, the travel agency for ticket or accommodation sales comply with this feature.
Multiple channels of distribution or dual distribution
Several channels are used to better cover the market.
Non-traditional channels
They serve to establish differences between one product and another from different companies (competitors).
Inverse channels
These are used when the products are returned to the manufacturer for repair or recycling, but this is done through different distribution channels.
Examples of distribution channels
Direct channel
The most used forms of distribution with this type of channel are: traditional direct door-to-door sales, telemarketing, telephone sales or mail order sales. The intermediaries do not participate in this type of channel.
This is the case of companies such as Avon and Amway.
Retailer channel
This is the case of Wal-Mart stores that buy directly from their exclusive manufacturers. It also includes supermarkets that purchase agricultural products directly from the producer.
Other examples are automotive dealerships, gas stations and clothing stores.
Wholesale channel
A representative case of this channel are the travel agencies that buy tour packages from wholesalers. Another case is the small village stores, which sell products purchased from wholesale distributors.
Double
Examples of this type of channels are the different franchises of the market and the exclusive importers.
References
- Rodríguez, R. H. Marketing with distribution channels. Struo Editions. Retrieved from books.google.co.ve.
- Chetochine, G. Strategic marketing of distribution channels: trade marketing, competition, own brand. Retrieved from books.google.co.ve.
- Salas Bacalla, J. Basic types of plant distribution. Retrieved from sisbib.unmsm.edu.pe
- Distribution channels. Recuperado de liderazgoymercadeo.com.
- Distribution channels: main characteristics of the wholesale distributors of mining extraction construction materials in Barranquilla - Colombia. Retrieved from publicaciones.urbe.edu.
- Types of Distribution Channels. Retrieved from promonegocios.net.
- Borrero, J. C. Strategic Marketing. Editorial San Marcos. Retrieved from books.google.co.ve.