This may raise product costs since each intermediary will get their percentage of the profits. The company may sell to a wholesaler who further distributes to retail outlets. In this channel, a company will use an intermediary to sell a product to the consumer. One benefit of this method is that the company has complete control over the product, its image at all stages and the user experience. Internet sales and one on one meetings are also ways to sell directly to the consumer. In this instance, the business may own all elements of its distribution channel or sell through a specific retail location. In this channel, the manufacturer directly provides the product to the consumer. There are four main types of distribution channels. These intermediaries are third party companies that act as wholesalers, transporters, retailers and provide warehouse facilities. Also included in the channel are the intermediaries that are involved in this movement in any capacity.
DISTRIBUTION CHANNELS & INTERMEDIARIES What is a Distribution Channel?Ī distribution channel can be defined as the activities and processes required to move a product from the producer to the consumer.
4 ELEMENTS OF MARKETING MIX HOW TO
It focuses on where the business is located, where the target market is placed, how best to connect these two, how to store goods in the interim and how to eventually transport them. In turn, this would mean a greater share of the market and increased revenues and profits.Ĭorrect placement is a vital activity that is focused on reaching the right target audience at the right time. Through the use of the right place, a company can increase sales and maintain these over a longer period of time. In addition, a newer method is the internet which itself is a marketplace now. This movement could be through a combination of intermediaries such as distributors, wholesalers and retailers. In other words, it is how your product is bought and where it is bought. In the marketing mix, the process of moving products from the producer to the intended user is called place. In this section we will take a look at 1) an introduction of place, 2) distribution channels and intermediaries, 3) making channel decisions, 4) managing distribution channels, 5) the impact of the marketing mix on place, and 6) an example of Dell Computers’ distribution strategy.