Transcript Distribution Channel

Distribution Channels
BDI3C
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What is a Distribution Channel?
A set of interdependent
The paths of
organizations
ownership that goods
(intermediaries) involved O follow as they pass
in the process of making R from the producer to
a product or service
the consumer.
available for use or
consumption by the
consumer or business
user.
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Why are Marketing Intermediaries Used?
 Intermediaries are used when they are more
efficient in making goods available to target
markets.
 Intermediaries offer the firm more than it
can achieve on it’s own through:
Contacts,
 Experience,
 Specialization,
 Scale of operation.

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Distribution Options
 Move customers to the service
 Move service to delivery system to customers
 Catering cooked on location
 Deliver tangible element of service to customers
 Pizza delivery
 Pick-up things on which service is to be
performed

Valet service in hotels
 Operate at arm’s length
 mail, telephone, Internet, often use multiple
approaches
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Number of Channel Levels
Channel Level - Each Layer of Marketing Intermediaries that Perform Some Work
in Bringing the Product and its Ownership Closer to the Final Buyer.
0-level channel – Direct
Producer
Consumer
1-level channel
Producer
Retailer

Consumer
Retailer

Consumer
Retailer

Consumer
2-level channel
Producer

Wholesaler
3-level channel
Producer

Wholesaler 
Jobber

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The Business Location
A. Understand your marketing strategy and target market of the
company – which location best suits your objectives?
B. Regional analysis involves the selection of geographic
market areas.
A firm needs to make sure that a region has sufficient and
stable demand to support this firm.
C. Choosing the area within the region:
Demographic, psychographic characteristics and competition
are factors to consider.
D. In choosing the individual site, business will consider
several factors:
E.g., compatible businesses and competition in the area.
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