Numbers of Distribution Channel Levels

Each layer of marketing intermediaries that performs some work in bringing the product to its final buyer is a "channel level". The figure below shows some examples of channel levels for consumer marketing channels:







In the figure [?], Channel 1 is called a "[?]-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells [?] to [?]. An example of a direct marketing channel would be a factory outlet store. Many holiday companies also market direct to consumers, bypassing a traditional retail intermediary - the travel agent.

The remaining channels are "[?]-marketing channels".

Channel [?] contains [?] intermediary. In consumer markets, this is typically a [?]. The consumer electrical goods market in the UK is typical of this arrangement whereby producers such as Sony, Panasonic, Canon etc. sell their goods directly to large retailers such as Comet, Dixons and Currys which then sell the goods to the final [?].

Channel [?] contains two intermediary levels - a [?] and a retailer. A wholesaler typically buys and stores large quantities of several producers goods and then breaks into the bulk deliveries to supply retailers with smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense. This arrangement tends to work [?] where the retail channel is fragmented - i.e. not dominated by a small number of large, powerful retailers who have an incentive to cut out the [?]. A good example of this channel arrangement in the UK is the distribution of drugs.