The distribution channels are the phase that follows the production process of goods or services , they are located in the marketing stage, passing through their delivery to the final consumer. Distribution is made up of a series of activities and operations that seek to ensure the arrival of products or services to buyers, facilitating their selection, acquisition and use.
The main objective of the distribution channels is to deliver the product to those areas or establishments where potential consumers who think of buying this type of product are, the selection of a certain intermediary will depend on the type of product.
Functions of distribution channels
Types of distribution channels
Distribution channel for consumer goods
This type of channel has the objective of getting the products to the final consumer through different levels of intermediaries. It should be noted that the higher the number of levels, the higher the price of the products. Among the most common are the following:
Called the direct channel, it does not have intermediary levels, and manufacturers sell directly to consumers.
Producers-retailers or retailer-consumers
These have a level of intermediaries, known as retailers or retailers. They are the clothing manufacturers that sell their products to retail companies, to mention an example.
Producers-wholesalers-retailers or retailers-consumers
It has two levels of intermediaries, and is called channel three. It is frequently used by small food and drug retailers, or by those manufacturers who do not have the capacity to get their products to the final consumer.
Distribution channel of industrial goods
These send the raw materials to the companies that are responsible for transforming them to obtain a finished product. They are managed in a different way, the distribution is different, since there are fewer customers, but the sales volume is very high.
Service distribution channel
Its purpose is to deliver products to consumers through intermediaries. It occurs in two ways: the service is produced and offered at the same time, the service is offered when it is requested.
Types of Intermediaries of distribution channels:
They buy high volumes of merchandise to sell them by units. Merchandise is sold for personal use.
They buy and sell large quantities of merchandise to sell to retail stores and other businesses.
They do not get the ownership of the products, but they arrange the transfer of it.
The products are exposed in all possible places of commercialization
It is determined by granting exclusivity of product distribution to a few distributors, with geographical boundaries; but with the express condition that such dealers refrain from selling competing products
Selective or multiple distribution
It provides a relative weakening of the controls that every producer aspires to.