Distribution Channel
A set of interdependent organizations involved in the process of making a product or service available for use or consumption.
Producer → Wholesaler → Retailer → Consumer.
Intermediaries
Independent firms (wholesalers, retailers, agents) that help the flow of goods from producer to consumer.
Reduce the number of transactions required.
Direct Distribution
A channel structure where producers sell directly to the consumer without using intermediaries.
A farmer selling fruit at a local market or companies like Avon and Tupperware. Common in B2B for complex products like aero-engines.
Indirect Distribution
A channel structure that uses intermediaries (such as wholesalers, agents, or retailers) to move products from the producer to the consumer.
A small grocery store buying products from a wholesaler, or a consumer buying a Sony TV from a retailer like Currys
Business to Business (B2B) Channels
Distribution channels designed to serve organizational customers; they are typically shorter than consumer channels due to smaller customer numbers and greater product complexity.
A gas turbine manufacturer selling directly to a power plant, or using an agent to sell to business customers on commission.
Intensive Distribution
A strategy in which they stock their products in as many outlets as possible.
Toothpaste, candy, newspapers.
Selective Distribution
The use of more than one but fewer than all of the intermediaries who are willing to carry the company's products.
Household appliances, furniture.
Exclusive Distribution
Giving a limited number of dealers the exclusive right to distribute the company's products in their territories.
Luxury cars, high-end fashion.
Disintermediation
The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries.
Spotify replacing record stores; Airlines selling direct.
Vertical Marketing System (VMS)
A distribution channel structure in which producers, wholesalers, and retailers act as a unified system.
Can be Corporate (owned), Contractual (franchise), or Administered (power).
Franchising
A contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system.
McDonald's, Subway, Hertz.
Retailing
All the activities involved in selling goods or services directly to final consumers for their personal, non-business use.
Supermarkets (Tesco), Department Stores (John Lewis), or online stores (Amazon) selling to individuals.
Category Killer
A giant specialty store that carries a very deep assortment of a particular line.
Home Depot (DIY), PetSmart (Pet supplies), IKEA (Furniture).
Omni-channel Retailing
Creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping.
Buying online and picking up in-store ("Click and Collect").
Just-in-Time (JIT)
A logistics system where materials or products arrive exactly when they are needed for production or sale, minimizing inventory costs.
Toyota production system; Supermarkets holding low stock.
Channel Conflict
Disagreements among marketing channel members on goals, roles, and rewards.
A retailer complaining that the manufacturer is selling cheaper online.
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