Marketing Essentials

Chapter 21: Channels of Distribution

Chapter Summaries

Section 21.1

• A channel of distribution is the path a product takes from the producer or manufacturer to the final user.
• Channel members in the distribution of consumer products are manufacturers/producers, agents, wholesalers, retailers, and consumers. Channel members in the distribution of industrial products are manufacturers/producers, agents, industrial distributors, and industrial users.
• Manufacturers or producers may choose one or more paths (channels) to distribute products to the final user.

Section 21.2

• Distribution involves decisions about a product’s physical movement and transfer of ownership from producer to consumer.
• Distribution intensity may be exclusive, selective, or intensive.
• The Internet has allowed more and more business-to-business (B2B) transactions to happen online. It can provide one-stop shopping and substantial savings for industrial buyers.
• Product distribution in a foreign market often requires special planning and adjustment to suit the other country’s culture, but it also allows the opportunity to experiment with different distribution strategies.