Explain types of distribution channel.
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In marketing, goods can be distributed using two main types of channels: directdistribution channels and indirectdistribution channels. A distribution system is said to be direct when the product or service leaves the producer and goes directly to the customer with no middlemen involved.
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DISTRIBUTION CHANNEL
this is a chain of businesses or intermediates through which a good or service is passed to the consumer. this can include wholesalers, retailers, distributors or even the internet itself.
this channel is broken into two types one is direct and other is indirect.
this direct means the manufacturer will sell the good to the end consumer and indirect the goods will be sold by intermediates such as retailers and wholesalers.
TYPES OF DISTRIBUTION CHANNELS
Three Types of Distribution ChannelsWhile a distribution channel can sometimes seem endless, there are three main types of channels, all of which include a combination of a producer, wholesaler, retailer and end consumer.
The first channel is the longest in that it includes all four, from producer to the end consumer. The wine and adult beverage industry is a perfect example of this long distribution channel. In this industry, thanks to laws born out of prohibition, a winery cannot sell directly to a retailer. It operates in what is known as the three-tier system, meaning the winery is required by law to first sell its product to a wholesaler, who then sells to a retailer. The retailer, in turn, sells the product to the end consumer.
The second channel is one where the producer sells directly to a retailer, who then sells the producer's product to the end consumer. This means the second channel contains only one intermediary. Dell, for example, is large enough where it can sell its products directly to reputable retailers such as Best Buy.
The third and final channel is direct to consumer model where the producer sells its product directly to the end consumer. Amazon, using its own platform to sell Kindles to its customers, is an example of a direct model, which is the shortest distribution channel possible.
DISTRIBUTION CHANNEL
this is a chain of businesses or intermediates through which a good or service is passed to the consumer. this can include wholesalers, retailers, distributors or even the internet itself.
this channel is broken into two types one is direct and other is indirect.
this direct means the manufacturer will sell the good to the end consumer and indirect the goods will be sold by intermediates such as retailers and wholesalers.
TYPES OF DISTRIBUTION CHANNELS
Three Types of Distribution ChannelsWhile a distribution channel can sometimes seem endless, there are three main types of channels, all of which include a combination of a producer, wholesaler, retailer and end consumer.
The first channel is the longest in that it includes all four, from producer to the end consumer. The wine and adult beverage industry is a perfect example of this long distribution channel. In this industry, thanks to laws born out of prohibition, a winery cannot sell directly to a retailer. It operates in what is known as the three-tier system, meaning the winery is required by law to first sell its product to a wholesaler, who then sells to a retailer. The retailer, in turn, sells the product to the end consumer.
The second channel is one where the producer sells directly to a retailer, who then sells the producer's product to the end consumer. This means the second channel contains only one intermediary. Dell, for example, is large enough where it can sell its products directly to reputable retailers such as Best Buy.
The third and final channel is direct to consumer model where the producer sells its product directly to the end consumer. Amazon, using its own platform to sell Kindles to its customers, is an example of a direct model, which is the shortest distribution channel possible.
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