Channels of Distribution

Abstract

The subject of distribution has been described by Peter Drucker (1973) as the ‘economy’s dark continent’. What he meant by this statement is that out of all the areas of the marketing mix, the subject of distribution is perhaps the least researched and developed. It is often regarded as the ‘poor relation’ of modern marketing. This is a very strange state of affairs when we consider that distribution is an intrinsic part of any commercial organisation’s marketing mix, with a strategic role within that mix of absolutely paramount importance. The correct choice of distribution channels is of great importance to the success of any business enterprise, and often strategic and competitive advantage can be gained by using innovative and imaginative channels. For example, the home magazines Living and Family Circle are distributed almost entirely in supermarkets and hypermarkets and, what is more important, unlike the majority of other magazines on sale in the store these two are sold on the shop side of the checkout till. There are a number of other publications which have copied the example of these two magazines, but for many years these two highly innovative publications have managed to carve out a strategic competitive advantage simply by their choice of distribution channel When examining the flow of goods and/or services through a distribution channel, it is often helpful to use an analogy and think of the system as a pipeline with main pipes, subsidiary branches, free flows and blockages.