Distribution Channel Management

Posted in Operations and Supply Chain Terms, Total Reads: 399

Definition: Distribution Channel Management

As the name implies, it is the whole process of delivering a product/service from the manufacturer to the end customer. It is also known as marketing channel.

It is subdivided into 2 categories:

1. Direct Channel: The seller/supplier directly sells the product to the customer in direct channel. He himself choose the medium; be it ecommerce or through stores. It requires hiring of few sales people or building operations for ecommerce website.

2. Indirect Channel: A specialized intermediary is added in this type of channel as they have the required contacts, experience and scale of operations. He might be a consultant, Original Equipment manufacturer (OEMs), etc. The reason for this includes the efficiency of distribution costs.

For eg:

A Toyota dealer will depend on a lot of factors to persuade customers, such as other dealers and the motor company itself. He needs to ensure its sales are on a rise and the service which they provide is worthy of customer’s trust. So basically, the whole trust of Toyota depends upon the distribution channel.



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