Download to read offline
Distribution Channel.pptx
- 1.
- 2. WHAT IS ADISTRIBUTION CHANNEL? A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer. Distribution channels can include wholesalers, retailers, distributors, and even the internet. Distribution channels are part of the downstream process, answering the question "How do we get our product to the consumer?" This is in contrast to the upstream process, also known as the supply chain, which answers the question "Who are our suppliers?"
- 3. A distributionchannel represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. Distribution channels include wholesalers, retailers, distributors, and the Internet. In a direct distribution channel, the manufacturer sells directly to the consumer. Indirect channels involve multiple intermediaries before the product ends up in the hands of the consumer.
- 4. UNDERSTANDING DISTRIBUTION CHANNELS A distribution channel is a path by which all goods and services must travel to arrive at the intended consumer. Conversely, it also describes the pathway payments make from the end consumer to the original vendor. Distribution channels can be short or long, and depend on the number of intermediaries required to deliver a product or service. Goods and services sometimes make their way to consumers through multiple channels—a combination of short and long. Increasing the number of ways a consumer is able to find a good can increase sales. But it can also create a complex system that sometimes makes distribution management difficult. Longer distribution channels can also mean less profit each intermediary charges a manufacturer for its service.
- 5. DIRECT AND INDIRECTCHANNELS Channels are broken into two different forms— direct and indirect. A direct channel allows the consumer to make purchases from the manufacturer while an indirect channel allows the consumer to buy the goods from a wholesaler or retailer. Indirect channels are typical for goods that are sold in traditional brick-and-mortar stores. Generally, if there are more intermediaries involved in the distribution channel, the price for a good may increase. Conversely, a direct or short channel may mean lower costs for consumers because they are buying directly from the manufacturer.
- 6. INCLUDING STRATEGIC PARTNERSIN YOUR DISTRIBUTION CHANNELS If your company is a typical start- up or early- stage company, then you’re big on ideas and short on resources. You need to leverage your marketing strategy by including strategic partners as a part of your distribution channel. If your sales strategy includes having you and your two sales staff knocking on door, then your ability to scale is limited. But if you can enlist others as part of your distribution channel, you can grow more quickly by leveraging the pre- existing infrastructure and client relationships that distributors already have in place.
- 7. When youthink of your distribution channels, you need not be limited to traditional retail or B2B channels. Creative venture companies are always finding new ways to reach their customers. Here are a few to think about:
- 8. Affiliate marketing:In this approach, you create a network affiliates who make the sale for you while taking a cut of typically 10 to 20 percent on each sale. Thousands of bloggers and other content- laden websites that draw traffic are able to convert their visitor to customers, thus monetizing their sites while increasing your sales and profits. GPS-based marketing: In this approach, your research customers based on their location. Imagine an app that causes your cell phone to vibrate whenever you pass a sushi restaurant or bookstore. This type of thinking turns traditional distribution channel thinking on its head by creating customers in non- traditional ways.