Distribution Channel Plan & Management Templates
A firm can design any number of distribution channels they require. Alternate distribution channels can be distinguished by the number of intermediaries between producer and consumer. If there are no intermediaries then this is known as a zero-level distribution system or direct marketing. A level one channel has a single intermediary. This flow is typically from manufacturer to retailer to consumer, but may involve other types of intermediaries. In practice, distribution systems for perishable goods tend to be shorter – direct or single intermediary. In other cases, distribution systems can become quite complex involving many levels and different types of intermediaries. Managing these channels can be a challenge. This is why using proven alternate distibution channel plan templates is critically important.
The firm’s marketing department needs to design the most suitable channels for the firm’s products, then select appropriate channel members or intermediaries. The firm needs to train staff of intermediaries and motivate the intermediary to sell the firm’s products. The firm should monitor the channel’s performance over time and modify the channel to enhance performance. All these items are addressed in the distribution channel plan template.
To motivate intermediaries the firm can use positive actions, such as offering higher margins to the intermediary, special deals, premiums and allowances for advertising or display. On the other hand, negative actions may be necessary, such as threatening to cut back on margin, or hold back delivery of product. Channel conflict can arise when one intermediary’s actions prevent another intermediary from achieving their objectives. Vertical channel conflict occurs between the levels within a channel and horizontal channel conflict occurs between intermediaries at the same level within a channel.