Distribution methods are typically divided into two types: direct and
indirect methods. Direct methods are where the provider of the
services or products directly sells them to the end-user. Examples
include direct mail, company-owned retail stores, catalogs, and online
sales.
Indirect methods involve those where one or more parties come between
the manufacturer or service provider and the ultimate consumer.
Examples include using wholesalers, distributors, independent
retailers, and OEMs who manufacture for other companies.
Because of globalization, supply chains are growing increasingly
complex, leading to the proliferation of indirect methods,
particularly OEMs who manufacture for other companies that handle
distribution. Another example is the large number of companies that
manufacture products that are imported and sold by Wal-Mart.
However, the Internet and the desire to build strong brands have also
driven some companies to adopt direct methods. Apple's retail stores,
which seek to capitalize on the popularity of the iPod to drive
Macintosh sales, are one example. Many companies have adopted both
strategies, which can be beneficial by making their products easier
for consumers to buy, but which can also create conflict between
direct sales and partners in competing distribution channels.
Hewlett-Packard is an example of a company that has struggled with
this issue as it has sought to compete both with Dell in direct sales
and with other retailer-sold computer systems.
Sincerely,
Wonko |
