Distribution Channels
- the system of organizations involved in the process of making a product or service available for consumption or use
- facilitate the exchange of goods and services between buyers and sellers
- the Internet is a distribution channel
Functions of Channel Intermediaries
- Efficiency: distribution costs are reduced only id the retailers can perform the required functions more efficiently than the manufacturers could in the direct channel
- Effectiveness: the ability of the channel to perform functions that create value for customers
Disintermediation
- a strategy that involves the elimination of a channel intermediary
- elimnation of channel intermediary
- Internet-driving force for disintermediation: the Internet enables firms to interact at a much lower cost and higher speed than ever before
Distribution levers
- Direct: firms can go direct via the Internet, telephone, or mail
- Traditional Retailers: a retailer is a business whose sales volume comes primarily from sales to final consumers
- Virtual Shopping Malls: provide the same appeal as in tradition retailing (a shopping destination), especially important for brands with low awareness or brands in product categories where customers want to comparison shop
- Internet Exchange: equivalent of virtual shopping malls in the B@B area