American Intercontinental University
Unit 3 Individual Project
MKTG 205 – Principles of Marketing

Abstract
When creating a marketing strategy the first thing to ascertain is the importance of distribution channels and how they work. The reader should have a better understanding of the distribution channel levels, channel organizations, as well as understand the best channel members to be utilized in each target market.

Channel Distribution

When assessing the different distribution channels it is very important to know that distribution channels are the ways in which companies sell their products and services. Knowing the target market and their demographic needs will help establishing a marketing strategy that is successful. Another important factor is to determine channel members and how many will be needed to successfully get products or services to their consumers. There are two different distribution levels in marketing; the direct distribution level and the indirect distribution level. According to Kerin, Hartley & Rudelius, (2013) the direct channel of marketing is when the producer and the ultimate consumers deal directly with each other. With a direct channel there is no intermediaries, the producer handles all channel functioning. A good example of a direct channel is an insurance company. The second distribution level is the indirect level. Unlike direct distribution the indirect distribution level has one or more intermediaries between the producers and the consumers who perform different functions (Kerin, Hatley & Rudelius, 2013). A good example of an indirect level of distribution is a company who uses industrial distributers or agents to reach users. In addition to channel levels in marketing there are also several channel organizations which include; conventional, vertical, horizontal, and multichannel marketing systems. In