Before we talk about What are the 4 types of distribution? it is imperative to know the meaning of distribution channels. “The route or path through which the product moves from the spot of creation is known as the last consumer distribution channel.”
You can move goods both directly and indirectly. A distribution channel is direct when the producer supplies goods directly to the end consumer and uses no mediator. Here the manufacturer of the product does the marketing work.
If a manufacturer sells goods to consumers through one or more middlemen, the channel then is an indirect channel of distribution. In the indirect channels of distribution, middlemen carry out the functions of buying, selling, transporting, storing.
A distribution channel is a method that consumers use to deliver their products to consumers. The idea is to bridge this gap most efficiently and effectively. Distribution channels function whether the difference is a few miles or a few thousand miles. Groups using distribution channels are manufacturers of products. They can be any kind of person, from farmers to manufacturers of handmade embroidered hats.
Types of distribution channels in marketing
There are four major types of distribution channels. Here’s the answer to your question. What are the 4 types of distribution?
- Direct channel
- Indirect channel
- Selective distributive channel
- Intensive distributive channel
The point when the manufacturer or the producer supplies goods directly to the customers is a direct channel. The manufacturer in this phase of distribution channels plays out all the promoting functions himself. No middleman is there. In the direct channels of distribution, the manufacturer endeavors to arrive at the customers through his
- Own retail stores,
- House to house selling,
- By mail and
- By sales from the factory door.
Manufacturers for consumer links no doubt appear to be a simple and low-cost method of distribution channels. Hence, It is not practical for marketing a large number of consumer goods. Imagine for a moment that the difficulties of producing soap, hairpins, toothpaste, shoe polish, cigarettes, beverages, etc. would have to be directly faced with selling goods to consumers.
Indirect channels are also exclusive distribution channels. It is the marketing of goods first to the retailer, who sells them to consumers, which is an indirect channel of distribution. It is the most effective method of product distribution. Its usage is effective in promoting clothing, machines, automobiles, furniture, etc.
The reasons for choosing indirect channels of distribution are:
- Better control of supply of goods.
- Prompt disposal of products.
- Spend less on selling.
- Better training of the Suppliers and
- fast response.
Selective distributive channel
Marketing through the wholesaler is one of the widely used methods of worldwide distribution. These distribution channels enable the manufacturer to sell the goods to a selected few wholesalers. The wholesalers then sell them to retailers, who subsequently sell the products to consumers.
The wholesaler acting as a middleman takes very little of the goods, takes risks, employs trusted retailers, delivers goods on cash as well as on credit. Hence, spreads sales in a wide market. These kinds of distribution channels are viable for the promotion of drugs, hardware, tobacco, toys, food products, and so on.
Intensive distributive channel
In intensive distribution channels, the manufacturer uses several wholesalers and retail intermediaries to promote the product. The manufacturer uses this route of marketing to saturate the market with the product.
Distribution channel for industrial goods
Distribution channels through which industrial goods move from the place of production to the end consumers are industrial distribution channels. In the distribution of industrial goods, there are fewer middlemen and smaller channels of distribution, which should be in your mind: –
Industrial consumers purchase industrial goods in enormous amounts. They are, in this manner, bought directly from the manufacturer of the source of supply.
Buy in bulk
The industrial user purchases products generally of technical nature. The technical data in regards to the presentation, standard of the product, the establishment of machinery, the maintenance services, and so on, can not depend on the intermediaries. The industrial user accordingly needs direct managing the manufacturer to get full technical information on products. The middleman hence wipes out from the distribution channels.
Another reason for the small channel of distribution of industrial goods is that most industrial markets usually concentrate in a small geographical area. Buyers of industrial goods contact sellers directly and thus do not require an agent.
While choosing a distribution channel you should remember your association’s image, profitability, and the scale of operations for your product. Picking the correct distribution channel is fundamental to your organization’s prosperity. You should consider it carefully. You should initially understand that a distribution channel addresses the relationship between the manufacturer and the user. A strategic alliance with a retailer will impact that relationship.
Moreover, you need to comprehend your target audience and what their inclinations are. Will you sell an audience that is innovatively clever and subsequently open up to a digital storefront? Or then again, perhaps your intended target audience is more seasoned and more conventional? Once more, think about the expense of the various kinds of distribution channels. Think about your net revenue and volume you want while picking a channel.
Another important aspect of choosing a distribution channel is your organization’s brand. Don’t forget to think about the audience’s perception of your product and if it should sell to high-end designer stores or if the department store will. Finally, opening strategic channels of distribution in local markets may or may not increase the profitability of your products and you should duly consider it.
Before choosing a distribution channel, know that the distribution strategy has three functions:
- Pricing strategy
- Product Branding, Policies, and Willingness to Stock
- Buyer and manufacturer relationship.
When you choose an optimal distribution strategy, a strategic alliance between a manufacturer and a retailer and the two entities, profit from the relationship. It will also affect how your target audience will communicate with your product. MGH is one such company that has mastered all these types of distribution strategies.