BUAD 307





Channel Structures

PowerPoint Narration

Channel structures vary somewhat by the nature of the product.

Commercial jet aircraft are custom made and shipped directly to the airline. Automobiles, because they are difficult to move, are shipped directly to a dealer. It is clearly too difficult for the customer to come to Detroit or Tokyo to buy the car.  Therefore, the optimal channel length appears to involve one intermediary (although there is likely to be one or more central import facilities for imported cras) Other products are shipped through a wholesaler who can more efficiently handle, and combine, products from many different suppliers. Several layers of wholesalers may exist, depending on the product. Occasionally, agents may also be involved. Agents usually do not handle products, but instead take care of the business aspect of negotiating with distributors, which manufacturers may feel uncomfortable or ill prepared for doing themselves.