In marketing, a distribution channel is a vehicle used by the company to sell its products and services to it customer base. In general, distribution channels are either direct, meaning the company interacts with customers directly, or indirect, meaning intermediaries perform activities on behalf of the company to reach customers. When a company develops its marketing strategy, it determines which channels it wants to use. Companies can choose to use a single channel or multiple channel strategy.
Traditional media is a common distribution channel that businesses use to generate awareness about their products and services. Traditional media outlets include TV, radio, billboard advertising, magazines and newspapers. Because the cost of using these channels tends to be high, it's harder for small businesses just starting out to take advantage of them; however, local markets often have small, independent newspapers or community television stations that offer lower cost advertising options.
Direct response marketing is another type of distribution channel. Direct response includes a variety of communications vehicles such as postcards, sales letters, email marketing and television direct response infomercials. When you use direct response marketing, it's important to have a call-to-action. For instance, infomercials often start by showcasing a common problem, then illustrating how the product or service solves that problem. Direct response marketing can be an affordable way for companies to reach potential customers.
Public relations is a broad distribution channel. Today, PR involves pitching stories to media outlets and generating positive buzz about your company or brand, as well as managing your company's online presence and how your company interacts with its customers. For example, if a customer writes a negative review of your business online, your PR team might have a standard way of responding. The purpose of PR is to make people feel good about purchasing your products or services.
Internet and E-Commerce
While all the other distribution channels listed work in conjunction with the Internet -- for example, using social media as a part of a PR campaign -- there is a separate set of tools that can be used as a distribution channel that is purely made up of online activities. Internet marketing includes search engine optimization, affiliate marketing and online advertising. Search engine optimization, or SEO, involves tailoring your website and its content so when users search online for products and services similar to what your company provides, your website shows up at the top of the search results. Affiliate marketing and online advertising allow you to promote your brand on other websites with content that would be of interest to your customers.
Based in Miami, Kristen Bennett has been writing for business and pleasure since 1999. Bennett's work has appeared online at MarketWatch, The Motley Fool and in several internal company publications. She holds a Bachelor of Arts in economics from the University of Massachusetts, Amherst.