Distribution Channel Decisions

As consumers, we generally take for granted the role of marketing intermediaries or channel members. If we want a six-pack of soda or a box of detergent, we can buy it at a supermarket, a convenience store, or even a drugstore. Manufacturers understand the value and importance of these intermediaries.

One of a marketer's most important marketing decisions involves the way it makes its products and services available for purchase. A firm can have an excellent product at a great price, but it will be of little value unless it is available where the customer wants it, when the customer wants it, and with the proper support and service. Marketing channels, the place element of the marketing mix, are "sets of interdependent organizations involved in the process of making a product or service available for use or consumption."20

Channel decisions involve selecting, managing, and motivating intermediaries such as wholesalers, distributors, brokers, and retailers that help a firm make a product or service available to customers. These intermediaries, sometimes called resellers, are critical to the success of a company's marketing program.

The distribution strategy should also take into consideration the communication objectives and the impact that the channel strategy will have on the IMC program. Stewart and colleagues discuss the need for "integrated channel management," which "reflects the blurring of the boundaries of the communications and distribution func-tions."21 Consistent with the product and pricing decisions, where the product is distributed will send a communications message. Does the fact that a product is sold at Neiman Marcus or Saks convey a different message regarding its image than if it were distributed at Kmart or Wal-Mart? If you think about it for a moment, the mere fact that the product is distributed in these channels communicates an image about it in your mind. (Think about the Samsung discussion at the beginning of this chapter.) Stewart gives examples of how channel elements contribute to communication—for example, grocery store displays, point-of-purchase merchandising, and shelf footage. The distribution channel in a well-integrated marketing program serves as a form of reminder advertising. The consumer sees the brand name and recalls the advertising. (Think about the last time you passed a McDonald's. Did it remind you of any of McDonald's ads?)

A company can choose not to use any channel intermediaries but, rather, to sell to its customers through direct channels. This type of channel arrangement is sometimes used in the consumer market by firms using direct-selling programs, such as Avon, Tupperware, and Mary Kay, or firms that use direct-response advertising or telemarketing to sell their products. Direct channels are also frequently used by manufacturers of industrial products and services, which are often selling expensive and complex products that require extensive negotiations and sales efforts, as well as service and follow-up calls after the sale. The ad for Titleist putters shown earlier reflects the higher cost and quality associated with the brand.

Chapter 15 provides a discussion of the role of the Internet in an IMC program. As will be seen, the Internet is relied upon by many companies as a direct channel of distribution, since they offer products and services for sale on their websites. Amazon.com and Barnes&Noble.com are just two of the many examples of such efforts.

Most consumer-product companies distribute through indirect channels, usually using a network of wholesalers (institutions that sell to other resellers) and/or retailers (which sell primarily to the final consumer).

Continue reading here: Fiona Morrisson

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Readers' Questions

  • Fnan
    Is a business structure of interdependent organizations that reaches from the point?
    6 months ago
  • of origin to the consumer called a vertical integration or a horizontal integration?
    • bilcuzal
      What decisions go into selecting a distribution channel?
      1 year ago
      1. Market Knowledge: Understanding your target market is essential for selecting a distribution channel. This includes having knowledge of the geographic location, customer demographics, and customer buying habits.
      2. Price Structure: Different distribution channels have different associated costs and pricing structures. It is important to understand the costs associated with each channel before making a decision.
      3. Distribution Capabilities: Different distribution channels have different capabilities. This includes the ability to reach certain geographic areas, order fulfillment capabilities, and customer service capabilities.
      4. Brand Image: Different distribution channels have different associations with them. For example, a luxury brand may want to use a more upscale channel to maintain its image.
      5. Technology: Many distribution channels now involve the use of technology, so it is important to consider how the technology will be used to reach customers.
      • Principio
        What Is channel decision in marketing?
        1 year ago
      • Channel decisions in marketing are decisions about how to distribute and promote a product or service in order to reach the target market. This includes decisions about the type of channel, the type of partners, their geographic coverage, and any agreements that may need to be negotiated. Typical channels include retailers, wholesalers, and direct-to-consumer (DTC) sales.
        • mariano iadanza
          What is chanel decision?
          1 year ago
        • Chanel is a luxury fashion brand, and as such, its decisions are unique to the company. For example, the company has decided to focus heavily on digital marketing and direct-to-consumer selling in order to reach new audiences and ensure that their products are accessible to all. Additionally, the brand has decided to emphasize sustainability and use of ethical materials in its crafting processes.
          • Rodney
            Why are distribution channel decisions of such improtance to companies?
            1 year ago
          • Distribution channels are important to companies as they are the means by which products and services are delivered to customers. Distribution channels play a major role in a company's marketing strategy as they provide access to markets, facilitate customer purchase decisions, and make products available to customers. Through proper distribution channels, companies are able to maximize the reach of their products and services, ensure customer satisfaction, and effectively manage their inventory.
            • TORSTEN
              What are channels of decisions?
              1 year ago
            • Channels of decisions refer to the pathways that help an organization to make decisions and implement them. These channels typically involve a combination of different stakeholders such as executives, managers, employees, committees, and customers. Common channels of decisions include task forces, committees, councils, and boards of directors. Decentralized decision-making channels such as discussion boards or focus groups are also popular forms of decision-making.
              • abel
                What is distribution channel decision?
                1 year ago
              • Distribution channel decision refers to the selection of a particular channel for the distribution of a company's products and services. The strategy takes into account how the company should position itself in the market, how it will reach its target customers, and how it can capitalize on the advantages of a particular channel. It involves researching the different options available and assessing which will be the most cost-effective and offer the most opportunities for success.
                • Barbara Gerste
                  What is channel decision?
                  1 year ago
                • Channel decisions refer to a marketing strategy in which a business or organization decides which channels to use to promote, distribute, or sell its product or service. It involves decisions about the types of distribution outlets used to access customers and the geographic scope of the distribution network. Channel decision is an important part of a company's overall marketing strategy and helps to ensure that the right products and services reach the right customers.
                  • giuliana
                    Which distribution channel is used by companies such as avon and shaklee?
                    1 year ago
                  • Direct sales.
                    • marco
                      Why are distribution channel decisions such importance to companies?
                      1 year ago
                    • Distribution channel decisions are critical to companies because they dictate how products are made available to customers. The right distribution channel can lead to greater sales and profitability, while the wrong channel can bring in diminished returns. Companies must consider factors such as cost, logistics, competition, market reach, customer preference, and service when selecting an appropriate distribution channel. Without a proper channel in place, companies may struggle to reach their target audience, leading to lost sales and decreased profit margins.
                      • Hana Davidson
                        Which distribution channnel is used by companies such as avon ?
                        1 year ago
                      • Avon typically uses a multi-level marketing (MLM) distribution channel. This involves using independent sales representatives to market and sell products to both consumers and other distributors.
                        • may
                          What are marketing communication distribution channels?
                          1 year ago
                        • Marketing communication distribution channels are the methods used to deliver promotional messages to target audiences. The following are some of the most common distribution channels used in marketing:
                          1. Traditional Media: Traditional media includes television, radio, magazines, newspapers, and outdoor advertising. These channels are generally well-established and can reach a broad audience.
                          2. Digital Media: Digital media covers an extensive range of channels such as websites, mobile applications, social media, email, podcasts, and streaming services. Digital media offers more targeted and cost-effective solutions than traditional media outlets.
                          3. Direct Marketing: Direct marketing involves one-to-one communication with the audience. This could be through direct mail, telemarketing, customer surveys, or even in-person meetings.
                          4. Events: Events are a great way to engage directly with customers and build a relationship. This can include trade shows, conferences, seminars, and sponsored events.
                          5. Public Relations: Public relations involves gaining public support for a company, product, or service. This can be achieved by writing press releases, holding press conferences, or obtaining media coverage.
                          • nadine
                            What is marketing communication through distribution channel?
                            1 year ago
                          • Marketing communication through distribution channels includes the various marketing strategies used to communicate with customers and promote the sale of products through a company’s distribution network. Strategies may include in-store advertising and promotions, direct mail campaigns, and customer loyalty programs. Online channels may include social media, email, search engine optimization, and affiliate marketing. This type of communication allows companies to reach a wide range of customers, as well as to better understand the customer’s preferences and shopping habits.
                            • adonay
                              Which distribution channel is used by companies such as avon and tupperware?
                              1 year ago
                            • Direct sales is the primary distribution channel used by companies such as Avon and Tupperware. This channel involves using sales reps to market and sell the company's products directly to consumers.