Distribution Channels

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DISTRIBUTION CHANNELS

The distribution Channels allows companies be more competitive, searching how to reduce costs and helping consumers to acquire on an easy way their product. A company that has good distribution channel has a relevant competitive advantage in the market. Distribution channels have advantages and disadvantages that are going to be described along this essay.

It is important to take into account that it exist two channels of distribution; industrial and consumer channels. The purpose to mention this is because this two canals if there are very good strategic organized, generates aggregate value to the product, and a result the satisfaction of the consumer and overcoming its expectations about the product. If through the entire channel it is added value by each integrant, the product will be a competitive and top good or service. The book also mentions that the management that it’s in charge of the distribution has to be monitoring the environment. The reason of that is that the market environment is always changing, if this environment is efficient monitored, the company can be a step forward so this changes can’t be able to affect the strategic performance.

To be continued, also the book mentions some advantages because of the participation of intermediaries in the channel which are: the specialization and division of labor, the reduction of discrepancies of quantity and assortment of merchandise, there is a less distance with the target market, facilitates the purchase process, there is a significant reduction of contacts, facilitates scale economies and as we mentioned on the paragraph before there is a collaboration in the generation of aggregate value of time, place and form. To end with, it is relevant knowing that retailers and wholesalers (intermediaries) contribute in reducing the gaps between producers and consumers, in quality of place and moment.

On the other hand, there are several disadvantages that must be taken into...
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