There are 3 main types of distribution channels. They vary from one another, depending on the steps a product takes to reach the final consumer from raw materials. The primary function of distribution channels is that of networks that facilitate the movement of goods or services from producers to final consumers. The different types of distribution channels are direct, indirect, and hybrid.
E-commerce platforms also serve as a Fastener Supplier near San Antonio TX, allowing for more direct distribution and efficient management of customer relationships and intermediary associations. They have revolutionized the way customers get the products they want or need. It is very important that companies choose the distribution channel that aligns with their strategic objectives and their value proposition for the consumer. When selecting multiple distribution strategies, they must consider consumer preferences, speed of delivery, and potential conflicts between channels. Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer, or distributor is used in a specific geographic area.
When the company distributes its brand only through one or two important points of sale in the market, which are dedicated exclusively to it and not to all competing brands, it is said that the company is using an exclusive distribution strategy. This is a common form of distribution in products and brands that seek a highly prestigious image. Typical examples are designer items, major appliances and even cars. By granting exclusive distribution rights, the manufacturer expects to have control over the pricing policies, promotions, credit inventory, and intermediary services.
The company also expects to benefit from aggressive sales at these outlets. The levels of distribution channels reveal the different steps a product takes before reaching the customer. It starts at the manufacturer level and continues to the final purchaser. This helps companies make decisions about the best way to sell their products. The three main types include zero-level distribution channels, single-level distribution channels, two-level distribution channels, and three-level distribution channels.
All three levels have distinctive characteristics and can help companies reach their target customers. The three types of distribution strategies are intensive, selective and exclusive. Intensive distribution places products in as many retailers as possible. Selective distribution limits product placement to a specific group of retailers.
Exclusive distribution places products at one (or very few) retailers in each geographic area or at a specific retail brand.
