Distribution channel

A distribution channel, also known as a marketing channel or channel of distribution, refers to the path or route through which products or services move from the manufacturer or producer to the end customer.

It encompasses all the intermediaries and steps involved in getting a product from the initial production to its final consumption.

Distribution channels can include wholesalers, retailers, agents, distributors, and various methods of transportation and storage. They play a crucial role in ensuring that products are available in the right place at the right time, making them accessible to consumers.

A distribution channel is to be distinguished from a distribution network. The channel designates the structure that distributes the product. The network, on the other hand, is more concerned with the individuals who make distribution possible.

A distribution channel can be any of the following:

Ultra short: in this case, the producer goes directly to the consumer, without any intermediary. This is also known as direct sales.
Short: when there is only one intermediary between producer and consumer. This could be a retailer, for example.
Long: when several intermediaries are needed, such as traders, retailers or wholesalers.

When several distribution channels are used simultaneously to market a product, we speak of multi-channel marketing.

The distribution channel is defined by the distribution policy. This is a strategy that takes into account a number of factors, such as distribution cost, brand image, associated services and so on.

The distribution policy can vary according to the size of the company, its business model (e.g., B2B, B2C, etc.), and its financial resources. Some will prioritize a cross-channel or multi-channel strategy, for example.

Similarly, the production method also has an impact on the distribution channel.

The choice of distribution channel must be consistent with the 4P marketing mix.

In fact, the chosen distribution channels will vary according to product price. Generally speaking, luxury products are distributed by quality retailers with a good brand image.

Similarly, distribution channels must be consistent with product communication and packaging. Last but not least, competitive practices are also an important consideration.

The type of distribution is a highly influential factor when it comes to distribution channels.

With intensive distribution, there are many distribution channels, and the idea is to target as many points of sale as possible throughout the territory.
Exclusive distribution, on the other hand, is reserved for a network of very specific outlets.
Selective distribution targets a very specific and restricted clientele. This distribution method is often reserved for luxury products.

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