Types of Distribution Channels
What type of distribution exists when a company allows sales to a specific limited group/number of outlets in a given geographical area sell a manufacturer’s product?
Selective Distribution
A network of individuals and businesses involved in getting a product or service from the producer to the consumer.
Channels of Distribution
Buys in bulk and resell to retailers
Wholesalers
Big box Department
Discount Boutique
Convenience Supermarket
Warehouse club
Types of brick and mortar locations
Growth of online marketplaces: Amazon, Ebay, Walmart, Etsy
E-commerce
What type of distribution is used by companies that want to make their products available everywhere in as many sales outlets as possible/low-cost products with high frequency consumption?
Intensive Distribution
Businesses that buy goods from wholesalers or directly from manufacturers and resells them to consumers
Retailers
Sell directly to consumers
Retailers
●Store hours (convenience)
●Costs to start and run
●Location, location, location
Integrating physical and digital channels: Starbucks, Amazon, Sephora
Omni-channel
Which type of distribution is an agreement between a supplier and a retailer granting the retailer exclusive rights within a specific geographical area to carry the supplier's product?
Exclusive Distribution
Groups that act as intermediaries by bringing buyers and sellers together
Agents or brokers
Facilitate transactions without owning goods
Agents/Brokers
Costco and Sam's Club
Warehouse retailer/club
Eco-friendly distribution methods
No intermediaries are involved in selling these unique products from the producer to the consumer.
Direct Channel of Distribution
Businesses that obtain goods from manufacturers and resell them to distributors
Wholesalers
Manage inventory and delivery
Distributors
●See, touch, and try out merchandise prior to purchase
●Personalized experiences
●Location, location, location
Pros of brick and mortar locations
Impacts costs and customer satisfaction
Why distribution matters
Includes intermediaries like wholesalers and retailers to deliver products to the consumer.
Indirect Channel of Distribution
Online retailing that involves retailers selling products over the internet to customers (derived from retailer)
E-Tailing
Middlemen (agents, wholesalers, distributors, and retailers.)
Intermediaries
A scannable bar code, most often seen printed on product labels in a retail store. The label allows vendors to automatically track the movement of inventory. The SKU is composed of an alphanumeric combination of eight-or-so characters.
Stock Keeping Unit (SKU)
Communicates the positioning of the product, and its intended target market.
Channels of Distribution