Distribution
Channel
What is distribution channel?
The role of Channel
Topic
Outline
Channel levels
Channel Strategies
Channel Design & Managment
Marketing Logistics
Supply chain
Upstream
partners
Downstream
partners
1. What is distribution
channel?
Distribution channel
or marketing channel
• A set of interdependent organizations that
help make a product or service available for
use by the consumer or business user.
What is the role of Intermediaries?
Merchants
Synonyms
Agents
Facilitators
2. The role of
channel
How channel members
Add Value
PRODUCER
CUSTOMER
PRODUCER
CUSTOMER
PRODUCER
CUSTOMER
9
How channel members
Add Value
PRODUCER
PRODUCER
PRODUCER
CUSTOMER
DISTRIBUTOR
6
CUSTOMER
CUSTOMER
Channel Functions
Gather and distribute information
Engage in promotion
Contact prospective buyers
Match offer to buyer’s needs
Negotiate transaction
Channel Functions
Physical distribution of goods
Finance transactions along channel
Assume risks of channel work
3. Channel Levels
Channel Levels
CONSUMER CHANNEL
PRODUCER
PRODUCER
PRODUCER
WHOLESALER
CONSUMER
RETAILER
RETAILER
CONSUMER
CONSUMER
Channel Levels
BUSINESS CHANNEL
PRODUCER
PRODUCER
PRODUCER
MFR. REP
BUSINESS
CUSTOMER
BUSINESS
DISTRIBUTOR
BUSINESS
DISTRIBUTOR
BUSINESS
CUSTOMER
BUSINESS
CUSTOMER
4. Channel
Strategies
Channel Strategies
Conventional
PRODUCER
Vertical Marketing System
PRODUCER
WHOLESALER
WHOLESALER
RETAILER
RETAILER
CONSUMER
CONSUMER
VMS
Vertical marketing system
CORPORATE VMS
CONTRACTUAL VMS
FRANCHISE ORGANIZATION
ADMINISTERED VMS
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Corporate VMS
Contractual VMS
Franchised VMS
Administered VMS