Delivering Value to the Customer: A Contemporary Approach

Define the channel of distribution as the movement of the product from the place of production to the place of consumption, facilitated by suppliers, producers, retailers, wholesalers, and consumers.

Explore vertical and horizontal channels of distribution, from producer to wholesaler to retailer to consumer, and from one level to same-level partners. This sets the stage for channel conflict.

Explore how distribution channels perform transactional, logistical, and facilitating functions—buying and selling, risk taking, assorting, sorting, storing, transporting, financing, grading, and marketing research—to deliver value.

Explore direct and indirect channels of distribution and compare intensive, selective, and exclusive channels, linking them to convenience, shopping, and specialty products to guide channel selection.

Explain how channel members add value by serving as intermediaries that connect producers to many customers, simplifying purchasing through retailers and distributors, while adding upward pressure on price.

Explore channel conflict in marketing, defining vertical and horizontal conflicts, and how disagreements over goals, rewards, and authority affect producers, wholesalers, retailers, and the value chain.

Explore conventional versus contemporary channels of distribution, highlighting how a vertical marketing system unites producers, wholesalers, and retailers to align duties and rewards for improved channel efficiency and reduced conflict.

Explore how a vertical marketing system unifies producers, wholesalers, and retailers to streamline distribution, contrasting it with conventional channels. Learn the three forms: corporate, contractual, and administrative vertical marketing systems.

Explore disintermediation, the process of eliminating channel members to reduce costs and deliver products directly to customers, often lowering prices online versus brick and mortar stores.