And if you wish to expand your company globally you need agents and distributors in these countries to help you. A household goods maker turns to a big-name retail corporation’s outlets to sell products to his or her target audience. Using a distribution channel will help you widen your customer reach. They are categorized as direct and indirect distribution channels. Indirect Distribution Channel. An intermediary in the channel is called an agent/middleman. A. You can cover a far greater geographical area with indirect distribution, and hence pull in a lot more customers. Horizontal, vertical and Multichannel conflicts are explained. Conversely, in an indirect product distribution channel, there are middlemen for your goods to arrive at the customer. Extensive distribution B. This is an example of _____. This year, I have been delivering many keynote addresses and workshops for companies with distribution channels or indirect sales organizations. One level channel of distribution works best for manufacturers dealing in shopping goods like clothes, shoes, furniture, toys, etc. Nike sells in tens of thousands of 3rd … In view of the number of intermediaries involved in distribution channels, these can be classified into three broad categories. Zero-Level Channel: When the distribution of the product is direct from the producer to the consumer or the user. An example of a direct sales channel versus an indirect sales channel would be Nike. As more intermediaries are added to the channel, the price gets higher and higher for the end consumer. These are: 1. If you go to a Nike store or the Nike website to purchase a pair of their shoes you would be using a direct sales channel. These distribution channels, in a way, refer to the methods of marketing also. It is important that a company which sells its products through channel marketing, understanding the different types of channel … With hybrid distribution, companies get the broad distribution of indirect channels, while owning the customer experience and expanding margin through their direct channels. Indirect distribution occurs when there are middlemen or intermediaries within the distribution channel. Nike is a great example of a hybrid distribution model. Direct Distribution channel. Direct distribution channel is most commonly observed in B2B companies and it is observed lesser in B2C Companies. Three examples of this form of distribution are as follows. A direct marketing channel C. An indirect marketing channel D. Intensive distribution E. Disintermediation. An intensive distribution strategy would be best implemented for these products. Simply put, an indirect distribution channel is defined as the route in which a product moves from its origin of the manufacturer through various numbers of selling systems before eventually making it to the end-user or consumer. You find an indirect distribution model any time an intermediary gets involved. Using our earlier example in the lumber industry, the manufacturer, retailer, and furniture maker would all be middle-men. There are 3 types of channel conflicts which can arise in a channel marketing company. Channels normally vary from two-level channels without intermediaries to five-level channels with three intermediaries. Indirect channels can be classified into three types: One-level Channel (Manufacturer to Retailer to Customer): Retailers buy the product from the manufacturer and then sell it to the customers. ADVERTISEMENTS: Distribution channel is a means used to transfer merchandise from the manufacturer to the end user through retailer and other necessary intermediaries. C. An indirect marketing channel. At any given point of time, when a company sells a product directly to the end customer, then it is known as Direct distribution channel.