Examples of distribution channels in the following topics:
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- To maximize sales, a company must carefully consider the fit between its products and the available distribution channels.
- Marketers must carefully evaluate how their products fit into different distribution channels.
- It is important for a company to match its products with the characteristics of the distribution channel.
- Candy uses an intensive distribution channel, meaning it is widely available at a low cost.
- Explain the importance of pairing a brand's products with the appropriate distribution channel
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- An alternative term is distribution channel or 'route-to-market'.
- Cost, flexibility and quick adaptation to changing markets and demand are usually the top factors sellers consider when assess and choosing distribution channels.
- These distribution types include:
- Intensive distribution - this channel allows the producer's products to be stocked in major, mainstream outlets.
- Exclusive distribution - producers select only very few intermediaries.
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- There are basically 4 types of marketing channels: direct selling; selling through intermediaries; dual distribution; and reverse channels.
- A marketing channel where intermediaries such as wholesalers and retailers are utilized to make a product available to the customer is called an indirect channel.
- Dual distribution describes a wide variety of marketing arrangements by which the manufacturer or wholesalers uses more than one channel simultaneously to reach the end user.
- Using two or more channels to attract the same target market can sometimes lead to channel conflict.
- An example of dual distribution is business format franchising, where the franchisors, license the operation of some of its units to franchisees while simultaneously owning and operating some units themselves.
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- The primary purpose of any channel of distribution is to bridge the gap between the producer of a product and its user.
- The primary purpose of any channel of distribution is to bridge the gap between the producer of a product and the user of it, whether the parties are located in the same community or in different countries thousands of miles apart.
- The channel of distribution is defined as the most efficient and effective manner in which to place a product into the hands of the customer.
- Banks have responded by developing bank-by-mail, Automatic Teller Machines (ATMs), and other distribution systems.
- Even performing arts employ distribution channels.
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- Other channel members can be useful to the producer in designing the product, packaging it, pricing it, promoting it, and distributing it through the most effective channels.
- Achieve a pattern of distribution - structure the channel in order to achieve certain time, place, and form utilities.
- After the distribution objectives are set, it is appropriate to determine the specific distribution tasks or functions to be performed in that channel system.
- An ability to do this requires the channel manager to evaluate all phases of the distribution network.
- Managers have many factors to consider when choosing a product distribution channel.
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- Members of a channel of a distribution are also customers of those elsewhere in the channel, and their expectations must also be met.
- It is important to remember that a channel of distribution may be made up of organizations, but those organizations are made up of people.
- Ideally, a channel member should coordinate their efforts with other members in such a way that the performance of the total distribution system is enhanced.
- By ensuring there are no leadership issues and by tackling the human element of the channel of distribution, expectations of the channel members can be effectively met.
- This distributor is a part of a channel of distribution, who must both meet expectations of its customers, as well as have its own expectations met.
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- Intermediaries, also known as distribution intermediaries, marketing intermediaries, or middlemen, are an extremely crucial element of a company's product distribution channel.
- Thus, while they do not own the product directly, they take possession of the product in the distribution process.
- For example, distributors of Coca Cola will not distribute Pepsi products, and vice versa.
- A firm can have any number of intermediaries in its channels.
- A "level zero" channel has no intermediaries at all, which is typical of direct marketing.
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- Trade discounts are most frequent in industries where retailers hold the majority of the power in the distribution channel (referred to as channel captains).
- It is important that these discounts are fair and offered to all channel members equally to avoid channel conflict.
- Some challenges include channel stuffing, where manufacturers induce channel members to buy far more products than they can sell in a reasonable period.
- Another challenge is diverting, which is when companies sell to channel members at a cheaper rate rather than pass on savings to consumers.
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- In intensive distribution (such as candy) the manufacturer attempts to get as many intermediaries of a particular type as possible to carry the product
- Once the number of levels is decided, the channel manager must determine the actual number of channel components involved at each level.
- How many retailers and wholesalers in a particular market should be included in the distribution network?
- The objective is to gather enough information to have a general understanding of the distribution tasks these intermediaries perform.
- Given the restrictions inherent in channel leadership, the final question is always "who should lead the channel?
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- Depending on customer needs, marketing channel strategies can utilize distribution centers or move products directly to a store.
- Depending on the product being sold and ultimate end user, companies can choose a marketing channel strategy that involves utilizing distribution centers (wholesalers) or moving their products directly to a store, or retailer.
- In order to decide on the types of retailers to include in its marketing channel, a firm must first understand the buying specifications of its consumers.
- Wholesalers perform a number of useful functions within the channel of distributions.