What is the distribution channel model

The distribution channel model is simply divided into long channels and short (flat) channels; channel strategy mainly refers to do channel expansion according to the company's own situation, product positioning, advantages and other strategic methods used.

My understanding is that the two channel mode Haier have adopted, such as their access to Gome, Suning and other hypermarkets, channel hierarchy is very little, or basically no hierarchy (such as Dell's direct sales model). Short channels are conducive to the company's profit maximization and product price advantage. The company can quickly get market feedback; long channels such as Haier's agents at all levels across the country, generally provincial, municipal agents, and even county-level agents, and then county-level agents to the township stores to release goods. The advantage of such a channel is that it can maximize the depth of the market, the most rapid through the dealer's original resources to enter the market, but due to too much classification, product profits will be deprived of dealers level by level, the price of the product in the terminal market is not competitive, the number of dealers is too large, the management cost will increase, dealers classified too much will often cause asymmetry of information between the enterprise and the terminal or the discrepancy of information, the enterprise can not quickly to the terminal market, the enterprise can not quickly to the terminal market. Enterprises can not quickly respond to changes in the terminal market, resulting in product positioning and market demand disconnect.

The classification of channel strategy is wide, such as how to choose the appropriate channel mode according to the product positioning, how to go in-depth to develop their own channels, how to expand their own dealer resources, such as point to point, to provide quality service, to provide a larger profit margins and so on.