31
THE RETAIL
DISTRIBUTION
CHANNEL
C H A P T E R
2
Early in 2005, IBM Business Consulting Services released a survey that
compiled in-depth interviews with more than 100 sales, marketing, and
merchandising executives at over 20 consumer products and retail
companies. Only 9 percent of the retailers felt their suppliers had “a good understanding”
of their business objectives. The gist of the survey was that
retailers felt the product manufacturers have focused their efforts on the end
users of the products (the consumers), without giving as much priority to
the needs of the other members of their distribution channels—namely, the
retailers to whom they sell.1
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There are several types of participants that make up a distribution channel, so
let’s begin by listing them, as in Chapter 1 with supply chain participants. You
will notice some overlap because, as also previously mentioned, retailers belong
to several (or many) different supply chains, each group focused on making
and marketing different products.
Retailers
The characteristic that sets a retailer apart from other members of its distribution
channel is that the retailer is the party who ultimately sells the product to
its end user or consumer. As you know if you’ve ever shopped for anything,
32 Chapter 2 The Retail Distribution Channel
In addition to a supply chain, manufacturers and retailers participate in another
give-and-take relationship known as a distribution channel or marketing channel.
A distribution channel is similar to, but different than, a supply chain. The distribution
channel is where the “deals” are made to buy and sell products. Sales, negotiations,
and ordering are done by these companie ...