HSC Production Management and Marketing 2nd Paper 6th Chapter Note Channel of Product distribution

HSC Production Management and Marketing 2nd Paper 6th Chapter Note Channel of Product distribution. A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. It can include wholesalers, retailers, distributors and even the internet itself. Channels are broken into direct and indirect forms, with a “direct” channel allowing the consumer to buy the good from the manufacturer, and an “indirect” channel allowing the consumer to buy the good from a wholesaler or retailer.

HSC Production Management and Marketing 2nd Paper 6th Chapter Note Channel of Product distribution

HSC Production Management and Marketing 2nd Paper 6th Chapter Note Channel of Product distribution

HSC Production Management and Marketing 2nd Paper 6th Chapter Note Channel of Product distribution

HSC Production Management and Marketing 2nd Paper 6th Chapter Note Channel of Product distribution

While a distribution channel can sometimes seem endless, there are three main types of channels, all of which include a combination of a producer, wholesaler, retailer and end consumer. The first channel is the longest in that it includes all four, from producer to the end consumer. The wine and adult beverage industry is a perfect example of this long distribution channel. In this industry, thanks to laws born out of prohibition, a winery cannot sell directly to a retailer. It operates in what is known as the three-tier system, meaning the winery is required by law to first sell its product to a wholesaler, who then sells to a retailer. The retailer, in turn, sells the product to the end consumer.

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HSC Production Management and Marketing 2nd Paper 6th Chapter Note Channel of Product distribution