Channel Concepts: Distributing the Product

Review

• The complex mechanism of connecting the producer with the consumer is referred to as the channel of distribution.
• Five "flows" are suggested reflect the ties of channel members with other agencies in the distribution of goods and services.
• A channel performs three important functions: (a) transactional functions, (b) logistical functions, and (c) facilitating functions.
• Channel strategies are evident for service products as well as for physical products.
• Options available for organizing the channel structure include: (a) conventional channels, (b) vertical marketing systems, (c) horizontal channel systems, and (d) multiple channel networks.
• Designing the optimal distribution channel depends on the objectives of the firm and the characteristics of available channel options.