Have you heard of channels of distribution in marketing? This is an aspect of the marketing process that many newcomers and seasoned marketers alike miss out on.
Channels of distribution refer to the method of delivering products/services from the company to the customer. So why does this matter?
A company has to figure out the best way to deliver its goods to its end users. The company has to know what will work best for its clientele. They also need to consider what works best for their image.
As a marketer, you might have considered traditional marketing vs digital marketing to promote a brand. Now, it’s time to look at the next step to promote what the brand offers.
Here’s what you should know.
Exclusive Distribution
Do you remember when you could watch your favorite Disney films on Netflix? That was a bygone era. Disney now offers exclusive distribution of its content through the Disney+ service.
Exclusive distribution happens when a brand wants to target a particular demographic.
The brand feels that the best way to do this is through an exclusive wholesaler or retailer. The difficulty of accessing this product or service is what makes it appealing to a customer base.
If a brand trusts its goods, then exclusive distribution might be the best route for them. This is usually only the best decision if a brand is well-established and has a popular reputation.
It’s imperative, however, to think carefully before making this decision. Many Disney fans weren’t too happy with the transition. Consider the pros and cons of exclusive distribution before you choose this for a brand.
Selective Distribution
This is a lighter version of exclusive distribution but still has many restrictions. You don’t need to go to a Tom Ford shop to buy Tom Ford products. But you won’t find Tom Ford products at a non-luxury retailer such as Target or Walmart!
Selective distribution is when a brand offers its products or services at particular locations. They are also selective on how these goods get presented to customers.
Walk into any luxury retailer and you’ll notice a uniform presentation of Tom Ford’s products.
The staff will get briefed on where to place each pair of shoes, cologne, and suit. This is a standard that has to be maintained in any retailer that sells Tom Ford products.
A person selling gym memberships also follows the rules of selective distribution. They might dress a certain way and only go to places where customers might be interested in gym memberships.
For example, they might always wear gym attire and go to local smoothie cafes to promote a gym.
Direct Sales
This happens when the brand sells its goods to the customer without the help of an intermediary. This is often the best marketing distribution channel for startups.
As a marketer, you might wish to advise the brand to find a great printing service. With this service, a brand can print small flyers or brochures that promote their products/services.
If they are unable to sell to a customer, the printout can encourage the customer to make a purchase at a later time.
In this situation, a brand will assign a few on-the-ground salespersons. This is the oldest form of marketing distribution and remains popular for many fledgling businesses.
You might have heard of the traveling salesman who would sell Bibles or Encylopedia Brittanica’s door-to-door. This is an example of direct sales for a product. If someone knocks on your door and offers to mow your lawn, this is an example of direct sales for a particular service.
This is best for a startup, but not for an established company. If you work with startups, let them know that they should consider this route before any others.
Retail and Wholesale
This is the most common marketing distribution channel for most companies. Retail is when a brand lets another business sell its products and services for them. The retail business works as an intermediary.
This works as a great option for small, medium, and large businesses. A brand can choose many retail options without having to be exclusive to one.
You can sell your products in major retailers such as Target, Walmart, Macy’s, and Nordstrom. You can also sell them in small “mom and pop” stores in your local community.
You can also sell your products through major online retailers such as Amazon, eBay, and Flipkart. Additionally, you can let smaller eCommerce websites sell your products to reach a niche customer base.
There’s one aspect of retail distribution called intensive distribution. This focuses on providing the product/service to as many retailers as possible. If the brand has a wide reach, this is the distribution channel to try.
Think about the huge name brands that you love.
Have you ever not seen Jif Peanut Butter in any supermarket? What about BIC lighters in every pharmacy you visit? These are prominent examples of intensive distribution.
If you handle marketing for a manufacturing company, wholesale is another popular distribution channel.
This lets the brand sell bulk products to the wholesaler. The wholesaler, in turn, will then sell these goods in bulk to a retailer.
This is a great option if your products are meant for mass consumption. This works for clothing, books, parts, etc.
Choose the Channels of Distribution in Marketing
Now you know the different channels of distribution in marketing and can choose the right ones for your brands. Make sure you assess what stage a company is in first.
If a company is a startup, direct sales might be the best option. If products/services are for mass-consumption, you want retail or wholesale. If you want to reach a specific audience, opt for selective or exclusive distribution.
As a marketer, make sure you study these channels and inform the company representatives of your plan. They will trust you to find the best distribution channels to reach as many customers as possible.
Please share this guide with your fellow marketers. You can find more great marketing and business tips on our website!
