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Saturday, 6 October 2018

Types of Distribution Channel



The four types of distribution channels as identified by Adirika et al (2001:205) are;

1) Direct channel.

2) Indirect channel.

3) Integrated channel.

4) Non integrated channel.

1) Direct Channel; a direct distribution channel occurs when the producer sells directly to the consumer or industrial uses, with no middleman intervening between the producer and end users or industrial users. This refers as direct channel because of the absence of non involvement of intermediary between the producer and consumers or industrial users. Direct channel is mostly applicable while distributing industrial goods though not restricted to that because by bus, medical doctors, restaurant operators, e.t.c, sell their goods and services directly to consumers. Others include, mail order selling, telephone selling, mass media selling btc.

2) Indirect Channel; by using this type of distribution, producers or manufacturers sell its goods and services to other channel members, intermediaries or middlemen example producer to retailer retailer to consumer. From the above, retailer is the intervening middleman.

3) Integrated Channel; integrated channel is where both the manufacturer and middle men are managed by the same organisation or resolved to co-operate in one way or the other for purpose of achieving a definite result. Integration can be horizontal or vertical. Horizontal channel integration refers to when two or more channel intermediaries at the same level of operation are combined under one management or agreed to co-operate between or among themselves for a joint marketing operations and resultant benefits. For example, where a little member of a channel integrates with another retailer to achieve some marketing advantages, vertical integration on the other hand is where a channel member merges with or assumes the function of a member whose function is different from but proceeds or succeed its function. It is when two or more channel intermediaries example manufacturer, wholesaler and retailer at different levels of the channel agree and combined or integrate their efforts and programs under a management in order to achieve a better marketing objectives. Example, a manufacturer or producer combining with a wholesaler or retailer. Such integration may be through the acquisition of an existing dependent unit or through the expansion of functions.