1. Distribution Channel Overview
Marketers are concerned about distribution because it determines how the customer
actually receives a product or service .A customer access in gaining access to the
product often flags the brand image. DELL, for example maintains complete control of
its distribution, so its customers buy directly from the manufacturer.
A distribution channel is a group of interdependent firms that work together to transfer
product and information from the supplier to the customer. Infact it is composed of the
following participants –
Each channel member perform some of the marketing functions needed to get the
product from the point of origin to the point of consumption .In addition to matching
buyers and sellers , intermediaries exist in the channel to perform some of these
functions perhaps more effectively & efficiently than other channel participants .Some
benefits of intermediaries include –
 Mediating transactions between parties
 Providing cost savings in the form of lowered search, monetary, transaction, and
energy costs.
The structure of the distribution channel can either make or impede possible
opportunities for marketing on the internet. In fact there are four major elements those
are combined to form a company’s channel structure –
Producers ,manufacturers or originators of the product or
service
Intermediaries -the firms that match buyers and sellers &
mediate the transactions among them
Consumers , customers or buyers who consume or use the
product or service

2. Types of Intermediaries
Channel intermediaries include wholesalers, retailers, brokers, and agents.
 Wholesalers buy product from the manufacturer 7 resell them to retailers
 Both brick –and-mortar and online retailers (sometimes called e – tailers) buy
products from wholesalers and sell them to consumers.
 Brokers facilitate transactions between buyers and sellers without representing
either party. They are market makers and typically do not take title to the goods.
 Agents usually represent either the buyer or seller, depending upon who hires
and pays them. They facilitate transactions between buyers and sellers and do
not take title to the goods .Manufacturers agents represent the seller whereas
purchasing agents represent the buyer.
For some digital products such as software , the entire distribution channel may be
internet based .In most cases however only some of the firms in the channel are wholly
or partially web enabled .For example non digital products such as flowers and wine
may be purchased online but must be delivered via truck.
Distribution channel length and functions
The length of the distribution channel refers to the number of intermediaries
between the supplier and the consumer .The shortest distribution channel has
no intermediaries –the manufacturer deals directly with the consumer in this
case (the way DELL computer sells directly to its consumers ). This is known as
the direct distribution channel.
4 Major
elements
of channel
structure
Types of
intermediaries
Length of the
channel
Functions of a
distribution
channel
Physical or
informational
(distribution )
system

3. Most distribution channel incorporates one or more intermediaries in an indirect
channel .A typical indirect channel include s suppliers, a manufacturer,
wholesalers, retailers and end consumers. Intermediaries help to perform
important functions.
Disintermediation describes the process of eliminating traditional
intermediaries .Eliminating intermediaries can potentially reduce costs since
each intermediary must add to the price of the product in order of product
.Disintermediation allows the supplier to transfer goods and services directly to
the consumer in a direct channel .Besides complete disintermediation tends to
be the exception because intermediaries can often handle channel function more
efficiently than producers can handle them .An intermediary that specializes in
one functions ,such as product promotion tends to become more proficient in
that function than a non specialist .