Posted in Operations and Supply Chain Terms, Total Reads: 4346
Definition: One Level Distribution Channel
One level distribution channel is one in which there is one intermediary between the manufacturer of goods and services and the consumers. Here, producer sells the goods to retailers who in turn sell the goods to the consumers.
Intermediaries are the organizations who make the product available for the consumers. Channels are classified on the basis of number of intermediaries between producer and consumer. So, the classification can also be done on the basis of direct (Zero level) and indirect marketing (One level, Two level).
These intermediaries also play an important role in matching demand and supply, and making contacts with the customer.
Intermediaries can also be:
• Online websites like flipkart, ebay, jabong etc.
• Products sold in B2B markets (eg. Firewall sold to an organization)
So, an important element of the Marketing Mix or the 4 P’s is Place, according to which a producer has to access the right distribution channel to make the goods available for the consumers. Channel decisions are very important as it affects other marketing decisions and long-term commitments.
One level distribution is popular in supermarkets, hypermarkets, retail chains, departmental stores.
• Lesser investment than in direct selling
• Suitable for small scale producers
• Expertise of the middle man can be used
• The geographical reach can be extended
• Reducing the stock-holding costs
• It takes some time as compared to direct selling
• The producer does not have control over distribution
• It does not generate direct cash for the organization