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2 School > Marketing
> Channel
Management
Distribution Channels
The 'distribution system' refers to the entire
marketing process, and not just the physical product distribution.
It is a set of interdependent groups and individuals
concerned with transferring specific goods or services from
the original producer or supplier to the final user or consumer.
Distribution channels are essentially sets
of relationships where the parties involved have to:
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Know each other's aims, policies and
procedures
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Be aware of their planning horizons and
management styles
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Be willing to accept tasks as well as
impose them on others
The most effective distribution channels are those where
the distributor's interests are made to coincide with the
producer's interests. Before any commitment is made, the
producer needs to be certain of the distributor's business
aims, attitudes and customer franchise.
It pays to remember that your distributors are customers
too, and have the option to buy elsewhere. Distributors
may take on some or all of the tasks involved in getting
goods or services from the producer's door to the consumer’s
threshold. Transferring part of the company’s image
to the distributor implies that decisions taken by the middleman
must be reviewed and should be of a long-term nature.
A typical distribution strategy comprises
of the following stages:
1. Discussing and determining distribution policy
2. Setting distribution channel objectives
3. Reviewing available channel options
4. Researching market conditions that affect channel choice:
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The local market environment
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Consumer and trade attitudes
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The financial climate
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Characteristics of physical distribution
facilities
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Internal management capabilities.
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