Bachelor of Business Administration (Hons) Finance (BA242)

Principles and practice of Marketing (MKT420)

D1BA2421A

Distribution Channel
 Briefly explain the type of distribution channel used by :

 BMW
 NESTLE
 LOREAL
 ADIDAS

Marketing channel or known as a distribution channel is a set of interdependent

organizations that help make a product or service available for use or consumption by
the consumer or business user.

Firstly, the type of distribution channel used by BMW is exclusive distribution

whereas exclusive distribution giving a limited numbers of dealers the exclusive right to
distribute the company’s products in their territories. For example, there is only one BMW
outlet available in Malaysia which is in Kuantan, Pahang. BMW charged for high price for
their car even though they have limited outlet.

Secondly, the type of distribution channel used by Nestle is wholesaler channel

whereas producer will sell their product to the retailer and retailer resell the product to
the consumer. For example, Nestle sell their product to the retailer like Mydin, Tesco and
grocery store and the retailer resell the product to customer.

Thirdly, the type of distribution channel used by Loreal is retailer channel whereas
producer sell their product to the customer through the retailer. For example, Loreal sell
their product to retailer like Watson and Guardian and the retailer then sell the product to
customer. The used of retailer channel will be beneficial for both producer and customer.
This is because customer can make comparison and buy their desire product and at the
same time can promot the product.

Lastly, the type of distribution channel used by Adidas is multichannel distribution

systems which are direct channel and retailer channel. For example, Adidas used direct
channel like online store to sell directly their product to customer. While for the retailer
channel, Adidas will sell their product to customer through the retailer like Al-Ikhsan that
selling sporting goods.