Channel width
Channel width term means the number of intermediaries, entities and institutions located in all levels of the distribution channel between manufacturer and purchaser available for providing the same distribution function at different stages in the distribution channel[1].
Distribution channel characteristics
There are at least three necessary market decisions around the channel to be made. A marketer needs to decide on the[2]:
- number of the channels
- their width
- their length
The difference between channel width and channel length
While the channel length depends on the number of times a product changes its place among intermediaries before it reaches the final product, the channel width is concerned with the number of intermediaries at the particular step of the distribution channel. The channel is considered to be long when its producer is required to move the product through several intermediaries. The channel is perceived as short when the product is moved between middlemen once or twice. The channel where the manufacturer sells the products directly to the final customers is called a direct channel. Channel width can be explained as a function of the number of all wholesalers and the various means that are used. It is also a function of the number of all wholesellers and their kind[3].
Factors affecting channel width
Channel width depends on the intensity strategy implemented by a company. As a result of this decision marketing channels can be divided into narrow ones, with a small number of agents or wide channels in which the products and services are offered by the biggest possible number of intermediaries at each level. The channel width dependents on many factors such as characteristics of products for instance its lifecycle stage, uniqueness and price or customers' behavior and loyalty to the brand[4].
In other words, the decisions regarding the width of the channel are based on the market coverage intensity that the architect of the channel deems necessary to gain the desired exposure and availability. Channel designers plan market coverage density ranging from very intensive distribution through rather selective distribution to even exclusive distributive network[5].
Examples of Channel width
- In retailing, channel width is the number of retailers at which a product is available. For example, a product may be available in a single store, multiple stores in one city, multiple stores in multiple cities, or even multiple stores across the country.
- In wholesaling, channel width is the number of wholesalers available to distribute a product. For example, a product may be available through one wholesaler, multiple wholesalers in one city or multiple wholesalers across the country.
- In the supply chain, channel width is the number of different intermediaries involved in moving a product from the manufacturer to the end user. For example, a product may be available through a single supplier, multiple suppliers in one city, multiple suppliers across the country, or even multiple suppliers across the world.
Advantages of Channel width
Channel width has several advantages in the distribution channel. These include:
- Increased access to customers, as a wider channel allows for more intermediaries to reach more potential buyers.
- Increased efficiency, as more intermediaries can help streamline the distribution process.
- Improved customer service, as more intermediaries can provide better customer service and support.
- Increased flexibility, as more intermediaries can provide more options for product delivery.
- Increased profits, as more intermediaries can help increase the demand for products and services.
- Improved product availability, as more intermediaries can help ensure products are available in more locations.
Limitations of Channel width
Channel width presents a number of limitations, including:
- Cost: Increasing the width of the channel can increase costs associated with the distribution process, such as inventory carrying costs, transportation costs, and marketing costs.
- Complexity: Increasing the number of entities involved in distribution can lead to complexity and inefficiency in the distribution process.
- Conflict: Increasing the number of entities involved in distribution can lead to conflicts among the entities, which can result in reduced efficiency or effectiveness of the distribution process.
- Control: Increasing the number of entities involved in distribution can make it difficult for the manufacturer to maintain control over the process.
Channel width is an important concept in distribution channels, as it determines the number of entities and institutions between the manufacturer and the end customer. Other related approaches include:
- Channel Depth: This refers to the number of stages/levels between the producer and the customer.
- Channel Structure: This refers to the type of channels used, such as direct, indirect or hybrid.
- Channel Intensity: This refers to the level of investment, effort and resources put into the distribution channel.
In summary, channel width is an important concept that affects the number of intermediaries between the manufacturer and the customer. Other approaches related to channel width include channel depth, structure and intensity. All of these approaches are important to consider when designing an effective distribution channel strategy.
Footnotes
| Channel width — recommended articles |
| Dual distribution — Distribution policy — Indirect marketing channel — Optimum size of the order — Optimization of transport — Distribution channel strategy — Direct delivery — Direct distribution — Material stream |
References
- Dunne P., Lusch R., (2007), Retailing 8th Edition, South-Western College Pub, Massachusetts
- Keillor B. D., (2007), Marketing in the 21st Century Interactive and multi-channel marketing, volume 2, Praeger, Westport
- Lewison D. M., (1996), Marketing Management Overview, The Dryden Press / Harcourt Brace College Publishers
- Lundén B., Svensson U., (2014), Marketing for Small and Medium Enterprises, Björn Lundén Information AB., Stockholm
- Onkvisit S., Shaw J. J., (2004), International Marketing Analysis and Strategy, Prentice Hall, Essex
- Pękała W., Szopa P., (2012), Distribution Channels and Their Roles in the Enterprise, Polish Journal of Management Studies, Częstochowa
- Reid R. D., Bojanic D. C., (2009), Hospitality Marketing Management, Wiley, New Jersey
- Schmidt S., (2015), Chances and Problems of Marketing of Ecological Products, Open Publishing GmbH, Verlag
Author: Aleksandra Puchała
