Definition

distribution channel

A distribution channel is the chain of individuals and organizations involved in getting a product or service from the producer to the consumer. Distribution channels are also known as marketing channels or marketing distribution channels. 

In this context, the individuals and organizations are known as intermediaries; channels are categorized according to the number of intermediaries between the producer and the end user. A direct marketing channel, for example, which has no intermediaries between the producer and the consumer, is known as a level zero channel. A distribution channel that has a single intermediary (typically, a retailer) is known as a level one channel. Level three and higher distribution channels have additional intermediaries, such as value-added resellers (VARs), system integrators (SIs) and distributors or wholesalers. The distribution channel is further broken down into component channels, such as the sales, product and service channels, each of which may consist of several intermediaries.

There are many factors to consider when selecting the appropriate distribution channel for a given product or service. A channel strategy is the plan a producer develops for distribution. 

Contributor(s): Ivy Wigmore
This was last updated in March 2013
Posted by: Margaret Rouse

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