Channel Levels - Definition, Types & Example
What is Channel Levels?
Channel level refers to the intermediary in marketing distribution channel between the producer/manufacturer and the end consumer. Every channel level plays a role in making the good available to the end consumer. The number of channel levels between the producer and consumer could be 0,1,2,3 or more.
Types of Channel Levels
There are typically 3 types of channel levels:
Zero Level
A zero level channel is a direct marketing channel where there is no intermediary and the producer sells directly to the consumer. For example – direct mails, telemarketing etc.
One Level
A one level channel has one intermediary, typically a retailer between a manufacturer and consumer.
Multi Level - 2 Level or 3 Level
Similarly a 2 level channel and a 3 level channel have 2 and 3 intermediaries respectively e.g. Distributors, Wholesales, Retailers etc.
Example of Channel Levels
Let us take an example of a typical CPG company which is at 3 levels. A manufacturer which produces the CPG product like shampoo. This product is then picked up by a distributor who takes it across country like USA. Then distributors then sell it to wholesalers who then sell it to retailers. From there it end customers would buy it from the retailers.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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