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Principles of Marketing - Philip Kotler

The number of channel levels

Distribution channels can be characterized by the number of the constituent layers. The level of distribution channel - is any intermediary that performs a particular job on the approximation of the goods and property rights to it to the end customer. Because specific work performed, and the manufacturer and the end user, they too are a part of any channel. The length of the channel you and will be denoted by the number of available therein intermediate levels. Several marketingovyx channels of different lengths is shown in Fig. 67.

Channel zero (also called direct marketing channel) consists of a manufacturer sells goods directly to consumers. Three main ways to direct sales - peddling, mail order sale and sale through shops belonging to the manufacturer. "Avon" company housewives traveling salesman selling cosmetics trade by hawking. The company "Franklin Mint" sells collectibles by mail order, and the firm "Singer" sells its sewing machines through its own stores.

One-level channel includes a mediator. In consumer markets this mediator is usually a retailer, and industrial goods markets, it is often a marketing manager or broker.

Duplex channel includes two intermediaries. In consumer markets such intermediaries usually becomes wholesalers and retailers on the industrial markets it may be an industrial distributor and dealers.

Three-level channel includes three intermediaries. For example, in the meat processing industry between wholesalers and retailers are usually worth the small wholesaler. Small wholesalers buy products from large wholesalers and resell them to small retailers, which are the major wholesalers, as a rule, do not serve.

Fig. 67. Examples of different levels of distribution channels

There are channels and with lots of levels, but they are less common. From the standpoint of the manufacturer, the more levels of the distribution channel is, the less its capability to control.