Marketing Channels

TYPES AND FUNCTIONS

What is a marketing channel?

a set of interdependent
organizations that help make
a product or service available
for use or consumption by the
consumer or business user.

Types of Marketing Channels

Direct Channels
Dual Distribution
Channels Using Marketing
Intermediaries
Reverse Channels

Direct Channels
The direct personal
presentation, demonstration,
and sale of products and
services to consumers, usually
in their homes or at their jobs

Companies Using Direct Marketing

Channels

Dual Distribution
Describes a wide variety of marketing
arrangements by which the manufacturer
or wholesalers uses more than one
channel simultaneously to reach the end
user.
They may sell directly to the end users as
well as sell to other companies for resale.

Channels Using Marketing

Intermediaries
A marketing channel where intermediaries such as
wholesalers and retailers are utilized to make a product
available to the customer is called an indirect channel.
The most indirect channel you can use
(Producer/manufacturer --> agent --> wholesaler -->
retailer --> consumer) is used when there are many
small manufacturers and many small retailers and an
agent is used to help coordinate a large supply of the
product.

Channel Efficiency: How

Intermediaries Reduce the Number of
Channel Transactions

Reverse Channels
Channels designed to return goods to their
producers.
Growing importance because of rising prices
for raw materials, increasing availability of
recycling facilities, and passage of additional
antipollution and conservation laws.
Also used for recalls and repairs.

Key Functions Performed in

Marketing Channels

Marketing Communications
Advertising the
Product
Providing a sales
force that offers
information & service
to customers

Transactional Functions
They minimize your transaction costs. You
only deal with a channel partner; they deal
with a large number of customers. They
also take the risk of holding inventory on
your behalf, reducing your stockholding
costs and your risk of holding unwanted
inventory.

Inventory Management
Ordering appropriate merchandise
assortment
Maintaining adequate stock to meet
customer demand
Storing merchandise in an appropriate
facility

Physical Distribution
Delivering products
Coordinating delivery schedules
to meet customer expectations
Arranging for the return of
defective merchandise

Market Feedback
Serving on manufacturer advisory
boards
Informing other channel members
of competitive activity
Participating in test market
evaluations

Logistical Functions
Distributors and wholesalers provide an
important logistical function in your channel
to market. Some channel partners take
responsibility for the physical distribution of
products to your customers. They store the
products and provide transport to fulfil
customers orders.

Financial Risk
Offering credit
Managing risks related to product
loss or deterioration
Managing risks related to product
safety and liability

Added Value
In certain markets, channel partners add
value to a transaction. They may increase
the value of a product, for example, by
customizing it for customers in specific
industries -- a process that could prove
expensive for your business.

fin

LAMADRID, JIFF
LOBAS, KRISTEL
BSA III-A