Distribution Channel

GROUP 5
HAC
BONGLOY, SEAN NYPHER
CABIGON, MAC KEVIN
FIGUEROA, YHAN ALBERT
NABAYSAN, REY JOHN
ORLANDO, VILLADELGADO
POMAR, JONATHAN VICENTE
TANGCAWAN,ROMNICK
TUHOOJA, DON

DESESTO, KASANDRA
OLIVA, NICOLE ANGELA
SINDAYEN,MYCAELLA
TACLIBON, ALICIA MARY
What is a Distribution Channel?
• A distribution channel in marketing refers to the path
or route through which goods and services travel to
get from the place of production or manufacture to
the final users. It has at its center transportation and
logistical considerations.
• a set of independent organizations involved in the
process of making a product or service available for
use or consumption
4 Types of Distribution
Channel
1. Business-to-business
(B2B) distribution
occurs between a producer and industrial users of raw
materials needed for the manufacture of finished products. For
example, a logging company needs a distribution system to
connect it with the lumber manufacturer who makes wood for
buildings and furniture.
2. Business-to-customer
(B2C) distribution
occurs between the producer and the final user. For
instance, the lumber manufacturer sells lumber to the
furniture maker, who then makes the furniture and sells it
to retail stores, who then sell it to the final customer.
3. Direct Distribution
A distribution system is said to be direct when the product or service
leaves the producer and goes directly to the customer with no
middlemen involved. This occurs, more often than not, with the sale of
services. This can also occur with organizations that sell tangible
goods, such as the jewelry manufacturer who sells its products directly
to the consumer.
Methods of Direct Channel are:

(a) Door to door selling

(b) Internet selling
(c) Mail order selling
(d) Company owned retail outlets
(e) Telemarketing
4. Indirect Distribution
Indirect distribution occurs when there
are middlemen or intermediaries within
the distribution channel. The larger the
number of intermediaries within the
channel, the higher the price is likely to
be for the final customer. This is because
of the value adding that occurs at each
step within the structure.
Following are the main forms of
indirect channels:
(a) Manufacturer-Retailer-
Consumer (One Level Channel):
This channel involves the use of one middleman i.e.
retailer who in turn sells them to the ultimate
customers. It is usually adopted for speciality goods. For
example Tata sells its cars through company approved
retailers.
(b) Manufacturer-Wholesaler-Retailer-
Customer (Two level channels):

Under this channel, wholesaler and retailer act as a link

between the manufacturer and the customer. This is the most
commonly used channel for distributing goods like soap, rice,
wheat, clothes etc.
(c) Manufacturer-Agent-Wholesaler-
Retailer-Consumer (Three level
channels):
This level comprises of three middlemen i.e. agent, wholesaler
and the retailer. The manufacturers supply the goods to their
agents who in turn supply them to wholesalers and retailers.
This level is usually used when a manufacturer deal in limited
products and yet wants to cover a wide market.
Supply Chains and the Value
Delivery Network
1. Upstream Partners
Includes raw material suppliers, components, parts,
information, finances, and expertise to create a product
or service
2. Downstream Partners
Includes the marketing channels or distribution
channels that look toward the customer
3. Supply Chain
“make and sell” view includes the firms raw materials,
productive inputs, and factory capacity
4. Demand Chain
“sense and respond” view suggests that planning starts
with the need of the target customer, and the firm
responds to these needs by organizing a chain of resources
and activities with the goal of creating customer value
What is Value Delivery
Network?
Is the firms suppliers, distributors, and ultimately
customers who partner with each other to improve the
performance of the entire system
Marketing Intermediaries
What is Marketing
Intermediaries?
Also known as distribution intermediaries, marketing
intermediaries or middlemen are an extremely crucial elements
of company’s product distribution channel and without
intermediaries it would be close to impossible for the business
to function at all because intermediaries are external groups,
individual or business that make it possible to deliver their
product to the end user.
4 Groups of Marketing
Intermediaries
1. Agent or
Individuals or companies that act an extension of the
manufacturing company and their job is to represent the
producer to the final user in selling product.
2. Wholesalers
Wholesaler do not work with small numbers of products:
they buy bulk and store their products in their own
warehouses and storage place until it is time to resell
them.
3. Distributors
Distributors function similarly to wholesalers in that they
take ownership of the product, store it, and sell it off at a
profit to retailers or other intermediaries.
4. Retailers
Purchase product from market intermediaries and sell
them directly to the end user for a profit.
Thank You 