Distribution Channel Management

Posted in Operations and Supply Chain Terms, Total Reads: 1175
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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.

 

Hence, this concludes the definition of Distribution Channel Management along with its overview.

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