Sales channels and their types. Sales, its essence. Sales channels, their types and functions Sales channels and their organization

Distribution channels for goods or products mean a chain of companies or individuals involved in their movement from manufacturer to consumer. Channels are characterized by the number of links involved in the process, as well as how functions are distributed between them.

The chain itself consists of the manufacturer, intermediaries and the final consumer. Intermediaries are not agents or sellers. But they are a full-fledged part of the process. The channels themselves are a structure whose purpose is to sell products.

The main division involves two categories:

1.Straight. The manufacturer independently, without intermediaries, solves the problems of selling its products. For example, through a network of own stores.

2.Indirect. A number of intermediaries are involved in the distribution process, that is, the chains can be long or short. Short ones are those highways where only one intermediary is involved. Long - more than one.

Indirect types of distribution channels are usually divided into:

1.Single-level. Involves the participation of one intermediary in the process of selling goods. In industrial markets, this is a broker or sales agent; in consumer markets, this is a retailer.

2.Two-level. Here there are two intermediaries between the producer and the consumer. In industrial markets it is a dealer and distributor, in consumer markets it is a wholesaler and retailer.

3. Three-level. In this case, the company's products pass through three intermediaries. These can be: a seller of large wholesale quantities, a seller of small wholesale quantities and a retail seller.

43. Resellers: types and types.

A reseller is a person in the product distribution system located between the manufacturer and its end consumer.
Trade intermediary activities are carried out under certain conditions. They are concentrated in the following forms:

· a) commercial activity - a reseller buys and sells products on his own behalf and at his own expense. That is, the product becomes the property of the intermediary, and he assumes the risk of its further sale. Merchant's remuneration is the difference between the sale price and the purchase price of the product;

· b) commission activity - a reseller buys and sells products not on his own behalf, but on behalf of the person he represents. The intermediary does not acquire ownership rights to the products that he sells. At the same time, his risks are incomparably lower compared to the risks of a merchant engaged in commercial activities. The commission merchant's remuneration is a percentage of the cost of goods sold or a fixed amount per unit of goods sold.

Based on the place that a reseller occupies in the marketing channel for the distribution of goods, the following groups of intermediaries can be distinguished.

1.Wholesalers. These are organizations that purchase goods from manufacturers or other wholesalers for further sale to retailers, consumer organizations or other wholesalers. Quite often, wholesalers are called distributors. Distributors may also be associated with intermediary activities in industrial markets, and dealers with related activities in consumer markets. In general, it must be admitted that the terms “distributor”, “dealer”, “broker” are used rather loosely, they are given different semantic content *

2. Retailers. These are organizations (or private entrepreneurs) that purchase goods from manufacturers or wholesalers for their further sale to end consumers.

44. Wholesale trade and its place in the company’s sales policy.

Wholesale represents any activity of selling goods and services to those who purchase them either for further use (processing, tailoring) or resale.

Therefore, in wholesale trade, goods purchased in large quantities and in large volumes.

Wholesale trade is the most important link that ensures acceleration of the process of movement of goods through distribution channels.

Wholesale trade determines the structure and direction of commodity flows. It acts in the market as an intermediary between industry and retail trade.

The goals of wholesale trade development are:

§ creation of a developed structure of distribution channels;

§ maintaining the required intensity of trade flows;

§ formation of reserve sources of financial support for the goods distribution process.

Wholesale trade plays the role of an active conductor of domestically produced goods and the movement and accumulation of a fairly large mass of imported goods in space and time to the domestic consumer market. It forces domestic manufacturers to improve the quality of their goods to gain a strong place in the competition.

Functions of the wholesale link:

§ distribution - purchase of goods of a specialized production range from various manufacturers and assortment of the assortment taking into account differentiated demand (formation of a trade assortment by sub-sorting of goods);

§ accumulation and storage - accumulation of time interval between different seasons;

§ organization of product distribution - overcoming space when the manufacturer-supplier and the retail enterprise are at a sufficient distance and shipment is carried out in large quantities (while the wholesale enterprise centrally delivers goods to retail enterprises in small quantities);

§ control - ensuring the quality of goods supplied to a retail enterprise;

§ market regulation - equalization of prices through purchases of large quantities of goods and obtaining significant discounts on purchased goods;

§ credit - financing of retail enterprises, when the delivery of goods is carried out without payment and there is a time interval between delivery and payment;

§ marketing - research and development of the market through advertising, marketing, pricing system due to attractive product packaging, etc.;

§ ensuring storage and transportation - ensures the rhythm and guarantee of delivery of goods to the retail network in small quantities.

45. Retail trade and its place in the company’s sales policy.

Retail trade - This is a commodity exchange process aimed at meeting the needs of people through the free sale of goods and services that are valuable to them.

Retail trade means in translation from English. - retail trade -“small business”, from French. retailer -“cut, crush”, from the Russian verb “to separate” - “to divide, separate a part from the whole, one from the other.” Therefore, recently retail trade, i.e. splitting up batches of goods for individual buyers for personal use began to be called “retailing,” i.e. retail, retailing It's just retail.

Retail trade solves the following problems:

§ purchases goods from a wholesaler and offers them for sale to anyone (store trade) unchanged or after processing (processing) usual for retail trade;

§ creates an assortment of goods and a list of services to meet the needs of customers;

§ demonstrates samples at open trade stands in order to receive orders for goods (order receiving point);

§ organizes trade with home delivery of goods. Trade with home delivery offers its goods, as a rule, outside the location of its warehouses or operates without them at all;

§ organizes peddling, when a retailer walks with his goods from house to house;

§ organizes street trading - the merchant shortens the shopping journey for the housewife. At a certain time, he appears in a residential area to sell vegetables, fruits, eggs, drinks, pickles, etc. to residents;

carries out petty trading - traders offer their goods on counters that are installed in squares and streets with busy traffic or in places where special events are held.

46. The concept of product promotion, types, goals.

Promotion is any form of communication used by a business to inform, persuade or remind about its products, services or the business itself. Promotion planning is the systematic making of decisions relating to all aspects of this activity.

The promotion plan consists of three parts: goals and objectives, budget and structure.

The general goal of promotion is to stimulate demand, that is, to increase or maintain demand (if it decreases). The general goal of promotion can be divided into two specific goals: stimulating demand for a specific product, stimulating demand for all products of the company. Both private goals lead to demand stimulation. However, in the first case, demand for a specific product is stimulated, and in the second, the image of the enterprise is promoted in the hope that buyers will associate this positive image with all goods produced by the company.

After setting goals, promotion tasks are determined - specific ways to achieve goals.

In this case, you need to take into account the basic rules of promotion:

The rule of product orientation is that promotion objectives must correspond to the stage of the product life cycle.

The rule of consumer orientation is that promotional objectives must correspond to the consumer’s degree of readiness to make a purchase.

The promotion budget represents the total cost of the enterprise to implement the promotion plan. The main methods for developing a promotion budget are: the residual method, the growth calculation method, the competitive parity method, the sales share method, the “based on goals and objectives” method.

The promotion structure is a specific combination of promotion types in the overall communication complex of the enterprise. There are two main and two additional types of promotion. The main types of promotion include advertising and personal selling, and additional types include propaganda and sales promotion.

Propaganda is the non-personal stimulation of demand for goods, not paid for by a sponsor, by disseminating commercially important information about them and the enterprise in the media. Propaganda is an integral part of the activities of organizing public opinion (public relations).

The sales system for goods is a key link in marketing, completing a set of measures to create products, produce them and bring them to the consumer. At this stage, the buyer recognizes or not the company’s efforts as useful and necessary for himself, and therefore buys or does not buy the product. The concept of sales should include a number of functions: transportation, warehousing, storage, processing, promotion to wholesale and retail trade levels, pre-sale preparation and the actual sale of goods.

The need to create a sales network for an enterprise is due to the fact that the manufacturer is not always ready to take on all the responsibilities and functions arising from the requirements of free exchange in accordance with the expectations of potential consumers. The importance of the sales network especially increases in conditions of competition, globalization of the market, electronic methods of disseminating information and the shortening of the life cycle of a product or service.

The sale of any company's products is carried out through a distribution system, the effectiveness of which guarantees the success of the business.

Product distribution channel is the path along which goods move from producer to consumer. Distribution channels can be defined as a set of independent intermediary organizations that ensure the transfer of ownership of a product (service) to someone else along the path of its movement from producer to consumer. Distribution channels are more than simple aggregations of firms. They are complex behavioral systems in which people and companies interact to realize their goals.

The main management decision of the manufacturer in the field of product distribution is the choice of the number of channel participants, in which the distribution of functions between them will minimize distribution costs while offering the target market the required range of goods in a timely and high-quality manner and ensuring maximum comfort to customers. Direct deliveries of goods from producer to consumer are called physical location, which includes three main elements: creation of a warehouse, transportation, logistics management.

The use of intermediary links is beneficial to the manufacturers themselves, since it reduces the number of connections and contacts that are necessary when selling products. Distribution channels can be characterized by the number of levels that comprise them.

Distribution channel level- this is any intermediary who performs this or that work to bring the product and the nature of its ownership closer to the final buyer. Since both the manufacturer himself and the end consumer perform certain work, they are also included in any drip.

Existing distribution channels involve the use of the following sales methods.

Direct sales(zero-level distribution channel) does not involve intermediaries; sales are carried out directly to consumers on the basis of direct contacts - through our own distribution network, through advertisements in newspapers and magazines with coupons for responses, via the Internet, telemarketing, direct mail. Internet sales are gaining momentum and may soon displace other distribution methods. A similar channel is used to sell goods that require demonstration and negotiations in order to convince the client to purchase them: cosmetics, raw materials, equipment, etc.

The advantages of direct channels include the possibility of complete control on the part of the manufacturer over the movement of goods; the disadvantages include insignificant coverage of the sales market. If direct sales are permanent and not one-time in nature, the enterprise must have its own regional warehouses. A distribution channel containing a zero level refers to direct channel, containing a larger number of intermediate levels – to indirect channels. From the manufacturer’s perspective, the more levels the distribution channel has, the less ability to control it.

Indirect sales(multi-level distribution channel) involves the sale of products through trading organizations independent of the manufacturer and is used to reach geographically dispersed markets. This type of sales is practiced in the sale of consumer goods. The goods from the manufacturer first go to the intermediary, and from him either to the final consumer or to another intermediary. The advantages of indirect channels are the expansion of sales opportunities, market boundaries, etc. The disadvantages are associated with the complication of control over the promotion of goods to the market. Each intermediary in the distribution chain represents a separate level of the distribution channel. There are one-, two- and three-level channels (Fig. 5.1).

Single-level channel includes one intermediary. In consumer markets, this intermediary is usually a retailer, and in industrial goods markets, a sales agent or broker. A large retail chain purchases goods from many manufacturers and sells them in its stores to end consumers.

Two-level channel contains two intermediaries. In consumer markets, such intermediaries are usually wholesalers and retailers; in industrial goods markets, such intermediaries are usually industrial distributors and dealers. Office equipment and software are distributed through distributors. For example, the Formosa group of companies, the largest Russian manufacturer of computer equipment, includes a distribution company that sells products through regional dealers.

Three-level channel covers three intermediaries - a wholesaler, a small wholesale intermediary and a retailer. For example, Wimm-Bill-Dann sells its dairy products through eight distribution companies, which supply them to dealers who establish direct contacts with retail chains.

Many companies use mixed distribution channels. These channels combine the characteristics of both direct and indirect channels. Products are sold both directly and through intermediaries, which are often called distribution levels.

The distribution channel can be assessed by two parameters - the length of the distribution channel, i.e. length and width. Distribution channel length is determined by the number of intermediate links and is associated with the transfer of functions to intermediaries. From the manufacturer's point of view, a large number

Rice. 5.1. Examples of marketing distribution channels

levels means a loss of control over the sales process and a complex scheme of distribution channels. It is generally accepted that the shorter the channel, the cheaper it is. Therefore, direct sales of products by a company may provide large market coverage, but will result in significant transportation and warehousing costs. This can be offset by higher profit margins obtained by eliminating intermediaries in the distribution process and by not sharing the margin with them. In addition to financial criteria, short channels have the advantage of faster access to end consumers.

In recent years, manufacturers have been trying to use shorter channels to control the distribution of their products. This is especially true for products that require prior familiarization and selection, and therefore expensive advertising is used to promote them. Practice shows that cheap goods with a lower level of technology used are better suited to long channels. More complex products, often requiring after-sales services, are sold through shorter channels. Most industrial products are sold directly by manufacturers to users. A quantitative characteristic of a channel, along with its length, is its width– the number of intermediaries (wholesale and retail) at any stage of sales of the enterprise’s products (for example, the number of all wholesale firms purchasing products from the manufacturer). Channel width is an important factor in reducing sales time. Usually large wholesale companies located in close proximity to the manufacturer or in large regional centers; small wholesale – in more remote and smaller settlements; retailers– in the places where end consumers live.

With a narrow channel, the manufacturer sells its products through several sales participants; with a wide channel, through many. Wanting to strengthen its position at a certain stage of the channel, a company can implement horizontal integration or expansion by acquiring enterprises of similar specialization. This allows the company to increase its size, market share, and use media and distribution and marketing methods more effectively.

Producers of services and ideas face the challenge of making their offerings accessible to target audiences. Therefore, companies operating in the service sector create their own distribution systems that correspond to the characteristics of their offer. For example, hospitals need to be located in such a way that they reach the residents of the area with their services and provide them with complete medical care.

The decision to choose distribution channels is one of the key ones in the company's activities. Each channel is associated with a certain level of sales and costs and must be formed over a long period of time. In this regard, the company can establish several options for distribution chains, including a different number of intermediaries. Distribution channel management is closely related to the problems of selecting and motivating channel partners. Periodic assessment of the performance of each link in the distribution chain based on profitability analysis is a mandatory procedure to ensure the viability of the channel.

The economic role of distribution channels

The economic role of product distribution channels is due to the fact that, by entering into certain relationships with partners, the company seeks to minimize the cost of time and money. This results in a number of benefits. By spreading costs across multiple partners, the firm achieves economies of scale. For example, many airlines encourage passengers to use the services of travel agencies, which issue and reissue tickets, accept payments, and deliver tickets to clients. Thus, savings are possible by reducing the number of contacts between manufacturers and end consumers. By reducing the number of layers of distribution channels, restaurants often purchase products directly from agricultural producers. Many companies expect a higher level of customer service from intermediaries because they are typically closer to the end consumer and have a better understanding of their needs and preferences.

Sales is the most important function and stage in the activities of any enterprise producing any product. Regardless of the nature of the products produced, any manufacturing company deals with the sale of finished products. It is possible to produce useful and high-quality goods (food, cars, equipment, software, clothing), but if you fail to build efficient sales channels products, it simply will not reach its target consumers. That is why so much attention is paid to sales, sales strategy and organization of distribution channels both in theory and in practical business. In this article we will look at sales channels in marketing.

Concept, characteristics and functions of the distribution channel

Sales channel in marketing(English " distribution channel") - a chain of individuals and/or legal entities involved in the process of movement (through purchase and sale) from manufacturer to consumer.

To put it as briefly as possible, then sales channel– a chain of intermediaries (although it is worth noting that distribution channels completely without intermediaries are possible, and we will talk about them a little later).

The sales channel (or otherwise: sales channel, distribution channel, distribution channel) allows you to connect the manufacturer of products or services with their consumers, ensuring the flow of goods in one direction and funds in the other. It turns out that the sales channel is a kind of bridge between the manufacturer and the buyer, a highway connecting them.

Example The distribution channel can be the following chain of participants: car plant (car manufacturer), car dealership (reseller, dealer) and car buyer (end consumer).

Important distribution channel characteristics in marketing – its length, width and levels:

length of the distribution channel - the number of links (intermediaries) in the distribution chain;
distribution channel width - the number of participants in the distribution process in each channel link (for example, if a company sells goods through 3 retail chains, then the width here will be 3);
channel level channel level") is a separate intermediary in the distribution chain, participating in the process of distribution of goods from manufacturer to consumer.

In our example, there is only one intermediary (car dealership). Accordingly, the length of the sales channel will be equal to 1. The same as the width (since cars are sold through one car dealership). And the car dealership itself can be considered one level of the sales channel.

In addition, the nature of the interaction between the links of the distribution system, as well as the functions they perform, are no less important.

The following can be distinguished sales channel functions in marketing:

research – collection of market data;
stimulating – encouraging the purchase of products;
contact – creating and maintaining feedback with customers;
negotiation room – establishing, agreeing and adjusting sales conditions (price, packaging, service);
organizational – ensuring the movement of goods (by and large: transportation, loading, storage);
financial – searching for financial resources to compensate for costs;
risky – accepting full responsibility for the operation of the channel.

As you can see, sales, in fact, plays a huge role in the work of almost any company. And now, having understood the concept and functions of a distribution channel, let’s move on to considering its varieties.

Types of distribution channels

Sales channels in marketing can be classified according to various criteria. But the most popular division of distribution channels according to number of intermediaries.

Main types of sales channels in marketing: direct and indirect

1. Direct sales channels– characterized by the absence of independent intermediaries. That is, the manufacturer independently and directly sells products to customers. He can do this in various ways:

through own (branded) stores;
peddling (for example, culinary products);
selling goods via the Internet.

Example: The publishing house has its own network of bookstores through which it sells books to its readers. Or a furniture factory sells its products at retail from a warehouse. Or the manufacturer of production equipment provides direct deliveries to customer factories.

Since there are no intermediaries in the direct distribution channel, it is considered to be of zero length and is called a “zero-level channel.” Direct sales channels are used quite rarely. They are mainly used in the manufacturers' market.

2. Indirect (indirect) sales channels– one or more intermediaries take part in the distribution process.

Depending on the number of intermediaries (length), indirect sales channels are divided into a number of varieties:

single-level - with a single intermediary. For example, it could be an agent for the sale of industrial equipment;
two-level - here we are already dealing with two intermediaries. An example is the market for consumer goods (food, household chemicals, clothing), where often on the path of products from manufacturer to buyer there are two intermediaries, as an option: a wholesale warehouse and a retail supermarket;
three or more levels – by analogy, this is a distribution channel with 3 or more intermediaries. For example, for a three-level distribution channel, they could be a large wholesaler, a seller of smaller wholesale quantities of goods, and a chain of retail stores.

If there are 1-2 intermediaries in an indirect sales channel, it is called short. If there are more than 2 intermediaries, such a distribution channel is called long.

When it simultaneously uses both direct and indirect distribution channels, such a distribution system is called combined. And a separate article will be devoted to this topic. In the meantime, let's look at the pros and cons of direct and indirect distribution.

Both direct and indirect marketing channels have their advantages and disadvantages. A brief comparison table is presented in the figure. And then we will analyze everything in more detail, and start with direct channels.

Comparative table of direct and indirect sales (distribution) channels from a marketing point of view

Advantages of direct channels sales:

comprehensive control over the sales process, product quality and price;
you can make a big profit, since the intermediary markup is excluded from the price structure;
close contact with consumers (the manufacturer is better aware of their desires and preferences);
increasing the share of cash in;
it is easier to maintain an attractive company image and correctly position the product;
Buyers are often more willing to purchase products from their direct manufacturer.

Disadvantages of direct channels distributions:

market coverage and sales volumes are generally small;
the necessary substantial investments for the implementation of sales activities;
there is an accumulation of products awaiting sale in the enterprise’s warehouses (as a result, storage costs and the risk of spoilage increase);
the manufacturer is forced to independently engage in market analysis, promote products and maintain a sales network, which requires additional resources and investments;
accounting for commodity and cash flows is complicated.

Indirect sales channels in marketing also have their pros and cons.

Benefits of Indirect Channels sales:

the manufacturer can have at its disposal an extensive sales network of an intermediary with wide market coverage, which will increase sales volumes and, as a result, profits;
there is an opportunity to quickly develop new markets;
the manufacturer is freed from the need to create his own warehouse and can focus directly on production;
sale of larger quantities of products is possible;
customer needs in quantity, speed and service are more fully satisfied.

Disadvantages of indirect channels distribution:

the manufacturer loses direct contact with its consumers, the quality of feedback deteriorates, and it becomes more difficult to respond to changes in demand;
the manufacturer also loses control over, in some way, the quality of the product;
the percentage of profit decreases (since it is necessary to provide discounts to intermediaries, selling goods at a price below the market price);
the manufacturer may become heavily dependent on intermediaries.

Thus, on the one hand, selling your products through intermediaries allows you to better satisfy the needs of a larger circle of buyers, but at the same time the manufacturer loses control over the price and the sales process.

On the other hand, selling goods by the enterprise itself without intermediaries is associated with great difficulties and high costs; it allows satisfying the needs of only a limited market segment, but the manufacturer understands its consumer better and can fully control the price and quality of the product.

As you can see, it is impossible to say definitively that indirect distribution channels are best or that direct distribution channels are bad. It all depends on the characteristics of the product, the specifics of the market, the capabilities of the manufacturer, the selected intermediaries, the sales strategy and many other factors. But it is clear that the choice of a distribution system should be approached as responsibly as possible.

Selection of distribution channels

Choosing the most appropriate sales marketing system for a given enterprise and market is extremely important. The fact is that the peculiarity of distribution channels is such that once having made a choice in favor of one or another system of distribution of goods, in the future it will be extremely difficult for the manufacturer to change anything in it. Once goods begin moving through the distribution channel, it is very difficult, and often almost impossible, to influence them.

Myself distribution channel selection process marketing can be divided into 4 stages:

Determining the company's sales strategy.
Finding suitable distribution channels.
Analysis and assessment of possible distribution channels.
Selecting partners and resellers.

When choosing a distribution channel, you should consider and analyze complex of factors:

characteristics of the product and the breadth of its range;
transportability of products, conditions and terms of their storage;
geographical location of the manufacturer;
level of profitability of the distribution channel;
specifics of the target market;
the degree of correspondence of the distribution channel to the target consumer segment;
the ability of the enterprise to control the distribution process;
level of competition in the selected market;
projected market share, sales volumes and profit levels;
the minimum necessary costs of cash and other resources for organizing sales;
opportunities to expand sales markets.

In addition, analysis of alternative distribution channels is often used based on complex from 3 groups of criteria:

Economic forces– level of possible sales, projected expenses;
Control factors– period of delivery of goods to the consumer, sales promotion system;
Adaptive factors– the time required to connect the channel to the enterprise’s distribution system, the level of its flexibility and ability to adapt to changes in the market environment.

In international economic practice, this set of criteria is called “ 3C» sales, according to the first letters of the names of the main criteria: “Cost” - costs or expenses, “Control” - control, “Coverage” - market coverage.

In addition, there is an expanded approach to the selection of sales channels in marketing, called “ 6C" Here, to the three above “C”, three more are added: “Capital” - capital (investments required to create a sales channel), “Character” - features of the channel (its properties, degree of compliance with the target market), “Continuity” - stability (financial stability of the trading intermediary, his focus on long-term partnership).

Which sales channel shows the best results based on the analyzed set of factors is selected.

Summary

Let's summarize the entire article and briefly list the main points.

Sales plays an important role in the activities of any enterprise, along with purchasing, production and other functions. Sales of finished products are carried out through sales channels (sales, distribution, distribution).

Sales channel– a chain of intermediaries along the route of goods from producer to consumer.

Each distribution channel is characterized length(number of links in the channel), width(number of participants in each link) and levels(each individual intermediary).

There are 2 main types of distribution channels in marketing: straight– sales are carried out without intermediaries, directly from the manufacturer to the final buyer; indirect– through intermediaries (a distribution channel with 1 intermediary is called single-level, with 2 - two-level, etc.). In addition, with the simultaneous use of both direct and indirect distribution channels, they speak of combined sales.

Particular attention should be paid to choosing a distribution channel (taking into account the characteristics of the intermediary, costs, the nature of the market and other factors), since it will not be easy to change it later.

Galyautdinov R.R.

Sales channels: concept and main types

The key link in marketing is the sales system. Regardless of the nature of the products, any company sells goods or services.

Sales implements several functions:

transportation;
warehousing;
storage;
revision;
promotion to wholesalers and retailers;
pre-sale preparation of products;
sale of finished goods to consumers.

Definition 1

A distribution channel in marketing is a number of companies or individuals that are involved in the process of moving a product from manufacturer to consumer through purchase and sale.

The distribution channel is understood as a chain of intermediaries who are an intermediate link between the manufacturing company and end consumers.

Main functions of sales channels:

research (studying the market and obtaining information about it);
stimulating (encouraging consumers to make a purchase);
contact (formation and maintenance of feedback with consumers);
negotiation room (coordination of sales conditions: price, packaging, service);
organizational (logistics organization);
financial (finding funds to cover expenses);
risky (taking responsibility for the effective operation of the distribution channel).

Sales channels include the following types:

zero channel;
single-level channel;
two or more level channels.

The first type of channel is the direct distribution channel. It consists of selling products from the manufacturer directly to the consumer without the participation of intermediaries.

The remaining two types of distribution channels are considered indirect. In a one-tier channel there is one intermediary (wholesaler, retailer, distributor or sales representative).

Two or more level channels provide for several intermediaries.

Note 1

Direct sales channels are distinguished by the absence of independent intermediaries. Direct sale of goods is carried out through our own branded outlets, via the Internet. An indirect channel may have one or more intermediaries. If a channel has 1-2 intermediaries, then it is called short, more than two - long.

Some companies use both direct and indirect distribution channels. This distribution system is combined.

Selecting a distribution channel in marketing

Choosing the optimal distribution system is an important task for any company. The peculiarity of distribution channels is that it will be difficult to change anything in them if the need arises. It is almost impossible to influence the movement of goods that have already begun their movement through the distribution channel.

Therefore, when choosing a distribution channel, a number of factors regarding consumers and the product itself should be taken into account.

It depends on the desires of consumers:

the nature of the sale (large retail chain, department store, small store, tent, etc.);
method of payment for purchases (cash or bank transfer);
brand preference.

For the sale of perishable goods with a short shelf life, short channels are used. Clothing and footwear are sold through wide distribution channels, and industrial goods are sold through short distribution channels (work to order).

When choosing distribution channels, you should also evaluate factors such as the geography of the manufacturer, the level of profitability of the distribution channel, the degree of correspondence between the channel and the target segment, the level of competition, the projected market share and sales level, and prospects for expanding sales markets.

The distribution channel selection process consists of four stages:

defining a sales strategy;
searching for suitable distribution channels;
analysis and assessment of possible sales channels;
selection of partners and resellers.

The choice of the optimal distribution channel depends on three criteria. The economic criterion is a comparison of costs and profits. If additional costs associated with the involvement of intermediaries, logistics and advertising exceed the projected level of income, then the company resorts to direct sales of its products. If the costs are justified and do not greatly affect the final price for the consumer, then the distribution channel is lengthened.

The controllability criterion provides for the need to maintain control of the manufacturer over the sale of its products. With a simple number of intermediaries, the level of control is reduced. Intermediaries pursue their own economic interests and have produced their own. If they do not match, conflicts may arise. And the last criterion of flexibility is the dynamics of the process of creating distribution channels, which determines the need for constant adjustments regarding the length and width of distribution channels.

Types of intermediaries

In marketing, there are three approaches to creating sales channels:

exclusive distribution (a limited number of intermediaries to control the sale of products in predetermined markets);
intensive distribution (involving a large number of intermediaries to sell products in a large number of territories);
selective distribution (a combination of exclusive and intensive distribution; manufacturers strive to control every stage of the movement of goods with minimal costs).

Intermediaries are classified according to several criteria. Based on the volume of products sold, wholesalers and retailers are distinguished.

Wholesalers are individuals or legal entities who purchase goods from different manufacturers in large quantities and sell them to retailers or consumers.

A retailer is an individual or companies that sell a large number of goods to the final consumer, which they purchase from wholesalers or directly from manufacturers.

Based on the basis of “on whose behalf the trade is conducted and who owns the goods,” four groups of intermediaries are distinguished:

distributors;
dealers;
commission agents;
brokers.

Distributors are wholesale and retail intermediaries who participate in the process of marketing products on behalf of the manufacturer, but at their own expense. They sell goods on the basis of the right that the manufacturer grants them, but they are not the owners of the products.

Dealers are wholesale intermediaries who carry out sales on their own behalf and at their own expense. They acquire ownership of products for further resale.

Commission agents are wholesale and retail intermediaries who work on their own behalf, but at the expense of the manufacturer. Ownership of the goods passes to the final consumer after payment.

Brokers are intermediaries whose purpose is to establish connections between companies interested in promoting goods. Their remuneration is a percentage of sales.

The chain itself consists of the manufacturer, intermediaries and the final consumer. Intermediaries are not agents or sellers. But they are a full-fledged part of the process. The channels themselves are a structure whose purpose is to sell products.

The main division involves two categories:

Direct. The manufacturer independently, without intermediaries, solves the problems of selling its products. For example, through a network of own stores.
Indirect. A number of intermediaries are involved in the distribution process, that is, the chains can be long or short. Short ones are those highways where only one intermediary is involved. Long - more than one.

Indirect sales

Indirect types of distribution channels are usually divided into:

Single-level. Involves the participation of one intermediary in the process of selling goods. In industrial markets - this is a broker or sales agent, in consumer markets -.
Two-level. Here there are two intermediaries between the producer and the consumer. In industrial markets it is a dealer and distributor, in consumer markets it is a wholesaler and retailer.
Three-level. In this case, the company's products pass through three intermediaries. These can be: a seller of large wholesale quantities, a seller of small wholesale quantities and a retail seller.

When a manufacturing company chooses the type of sales of products via the highway, it must be remembered that it must be optimal for a specific product, since all of the above have their own advantages and disadvantages.

Direct movement of goods has an extremely limited number of target markets, and also involves the accumulation of products in warehouses.

In addition, in this case the manufacturer will independently solve problems of product support after the sale. This requires financial investment and the availability of resources.

An indirect or indirect distribution channel involves a complete lack of contact between the manufacturer and the consumer. But they significantly increase the number of target markets, reach large-scale consumer audiences, increase sales volumes, thus increasing the manufacturer’s profit.

Chain organization

Product sales lines can be organized in different ways, so distribution channels are managed using various mechanisms:

Traditional classical scheme involves a manufacturer, several wholesalers and several retailers. Each individual link in the channel, in its own interests, tries to get maximum profit, even to the detriment of the entire structure.
Vertical marketing system. This scheme consists of a manufacturer and several intermediaries who act together as a single entity. There are subtypes of vertical marketing: corporate (production and distribution are under the same ownership), contractual (individual enterprises, based on contracts, coordinate their actions so that the system has the highest commercial results) and managed (production and distribution are coordinated not by the owner, but by the most large-scale enterprise).
Horizontal marketing system. Several separate enterprises create a single company to jointly sell products.
Multi-channel marketing system. The manufacturer uses several different distribution options simultaneously and manages the channels independently.

The specificity of distribution channels is that once a choice has been made, it will be extremely difficult for the manufacturer to change anything.

Therefore, before making a choice in favor of one or another implementation chain, it is necessary to analyze a number of factors:

analysis of the profitability of a certain highway for goods;
level of correspondence of the channel to the target audience of consumers;
the ability to control the flow of goods;
level of competition;
share of the maximum possible profit;
minimal costs of resources and money;
estimated sales volumes;
the opportunity to expand sales markets and attract new customers.

Factors may be different; they depend on the specifics of the industry in which the manufacturer operates.

But the listed provisions play a significant role in the effectiveness of the chosen product distribution scheme. The selection strategy is simple: the highway is selected, which, based on a combination of factors, is the most efficient.

Sales channels

In modern Russia, indirect or indirect distribution channels are a pressing reality.

Even simply due to the large-scale territory of the state, which is difficult to develop alone. When choosing one channel or another, and there are many of them today, the following factors must be taken into account:

level of knowledge and skills in the distribution of goods from producer to consumer, mastery of strategies for a specific market;
the amount of knowledge about the conditions of a particular market where the goods are expected to be sold;
availability of financial resources that are necessary in the field of product sales;
availability of the necessary resources (material base) that are necessary in the field of product sales.

The main functions of intermediaries in the distribution chain:

External logistics. A set of measures to ensure the availability of goods for the buyer.
External Marketing. Collection of marketing information, in particular about the desires and needs of the target audience. Promoting a product on the market through promotions, advertising, etc. Working with the target audience to convince them of the necessity and importance of this product.
External service. A set of activities aimed at gaining a product’s reputation, maintaining and increasing it.

Manufacturers choosing a distribution channel for their products (including intermediary organizations) need to understand one simple thing: to coordinate not on minimizing the costs associated with organizing and maintaining a specific distribution channel, but on how consumers perceive this intermediary: they trust, contact, prefer his. Thus, The reputation of the intermediary plays an important role in the effectiveness of the distribution channel. This factor must be taken into account at the beginning of creating a product distribution chain.