Channels of Distribution
Channels of Distribution
◦Product,
◦Price,
◦Place,
◦Promotion
What the “P” of Price is to Revenue
management, the “P” of Place is to
Distribution
To make a place decision,
marketers must decide on a
channel of distribution.
wholesaler
Wholesalers A business that obtains goods from manufacturers
and resells them to organizational users, other
wholesalers, and retailers, also called distributors.
retailer
Retailers A business that buys goods from wholesalers or
directly from manufacturers and resells them to
consumers.
E-Tailing e-tailing
Online retailing that involves retailers selling products
over the Internet to customers.
Parties Involved in Distribution
Descriptions
for Rack
Jobbers,
Drop
Shippers,
Brick-and-
Mortar, and
E-Tailers.
Parties Involved in Distribution
Descriptions for
Rack Jobbers,
Drop Shippers,
Brick-and-
Mortar, and E-
Tailers.
agent
Two Types of One who acts as an intermediary by bringing buyers
Agents and sellers together.
Manufacturers’
Representative
Brokers
Channels of Distribution
direct distribution
Channels of A channel of distribution that occurs when the
Distribution producer sells goods or services directly to the
customer with no intermediaries.
Direct
indirect distribution
Distribution A channel of distribution that involves one or more
intermediaries.
Indirect
Distribution
Comparing Distribution Channels for
Consumer Products and for
Industrial Products
Examples of Channels of Distribution
Cross out
the members
that do not
belong in a
particular
channel.
Distribution Planning
A producer uses multiple channels when its product is
for both consumer and industrial markets.
Selective distribution
Distribution in which a limited number of outlets in a
given geographic area sell a manufacturer’s product.
Intensive distribution
Distribution that involves the use of all suitable
outlets to sell a product.
Describe Each Type of Distribution
Locations for hotel brand distribution
◦ Franchising
◦ Ownership
◦ Management contracts
The sales staff and system
◦ Group sales or volume accounts
◦ Reservations and transient sales
◦ National sales offices
◦ Representation firms, consortia
Pushing the product “down” through the
distribution channel TO the customer
◦ Incentives to travel agents and intermediaries