Chapter 8: The Marketing–Finance Interface in Channels of Distribution Research: A Roadmap for Future Research
Katrijn Gielens and Inge Geyskens INTRODUCTION For each product and service, manufacturers have to set up distribution channels to reach their end-users, be they final consumers or business buyers. The design of these distribution channels can differ considerably and involves three major decisions: (1) a channel length decision, (2) a channel intensity decision, and (3) a multichannel decision. First, manufacturers have to decide on the length of the channel. In some instances, it can be beneficial to cater to the end-user directly, whereas in other circumstances manufacturers will use a set of (independent) intermediaries or resellers to make their products or services available to end-users. When such indirect channels are used, the manufacturer has to decide on the number of layers of different types of intermediaries that are built in between the manufacturer and the end-user. For example, is a wholesale and a retail level necessary or does a retail level suffice? Manufacturers also have to make a channel intensity decision by deciding on the number of intermediaries at each level of the channel. Will the product be offered exclusively through one intermediary per trading area, selectively through just a couple of intermediaries per trading area, or intensively through many intermediaries per trading area? Beyond the channel length and channel intensity decisions within a given channel, manufacturers need to decide on the number of different distribution channels they will be using to reach their end-users. This is the multichannel decision. Once a good channel design is in place, manufactures may...
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