Marketing Management (M240)

Graduate School of Business, Stanford University

Distribution

We divide the discussion of distribution channels into two sections: channel design and channel management.

Channel design requires answering the following questions:

What are the institutional needs of the target customer (e.g., information, logistical support, convenience, etc.)?
What are the available institutional alternatives?
Which of the alternatives best serves the needs of the target segment?

In designing channels, the following decisions must be made:

channel length (i.e., direct, indirect, indirect with intermediary)
single or multiple channel
hybrid channel

Channel conflict usually stems from some sort of goal inconsistency. It must be managed through the administration of channel power (either in the form of reward or coercion).

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