1. Vertical channel system
- Corporate system: Company’s own excessive channel works in corporate vertical system. It does all the works from production of goods or services to selling to final consumers. All the channels involved in distribution are integrated under single/sole ownership. The business firms which want to keep control over distribution channels use this system.
- Administered system: In this system, one company controls channel co-ordination activities. So, the company does not have formal organizational structure. In other word, this system is conducted under the leadership of any one channel member.
- Contract system: Members of vertical channel are independently involved in this system on contract. The members involved in this system conduct programs of distribution channels. The works of channel members are formally divided which are also controlled through co-ordination.
2. Horizontal channel system
3. Multi channel system
Meaning of Channel Structure
|Levels of Distribution Channel|
Channel Structure for Consumer Goods
|Channel Structure for Consumer Goods|
1. Producer → Consumer channel
|Technological goods such as television, deck, computer, automobile, machines and machinery goods are distributed through direct channel. Similarly, this channel is used to distribute perishable goods, such as milk, fruits, fish and meat, etc. Door to door service facilities such as mail, order, TV selling, exhibition arcade, telemarketing etc. are forms of direct distribution channels.|
2. Producer → Retailer → Consumer
3. Manufacturer → Wholesaler → Retailer → Consumer channel
4. Producer → Agent → Wholesaler → Retailer → Consumer channel
2. Producer → Distributor → Industrial user channel
3. Producer → Agent → Distributor → Industrial user channel
|Alternative Channel for Industrial Goods|