Marketing channel

A marketing channel is a set of practices or activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products and services get to the end-user, the consumer; and is also known as a distribution channel. A marketing channel is a useful tool for management, and is crucial to creating an effective and well-planned marketing strategy.

Another less known form of the marketing channel is the Dual Distribution channel. This channel is a less traditional form that allows the manufacturer or wholesaler to reach the end-user by using more than one distribution channel. The producer can simultaneously reach the consumer through a direct market, such as a website, or sell to another company or retailer that will reach the consumer through another channel, i.e., a store. An example of this type of channel would be franchising.

Roles of marketing channel in marketing strategies

There are four main types of marketing channels.

The producer sells the goods or provides the service directly to the consumer with no involvement with a middle man such as an intermediary, a wholesaler, a retailer, an agent, or a reseller. The consumer goes directly to the producer to buy the product without going through any other channel. This type of marketing is most beneficial to farmers who can set the prices of their products without having to go through the Canadian Federation of Agriculture. Typically, goods are that consumed by a smaller segment of the market has influence over producers and, therefore, goods that are produced in the response on the order of a few consumers are taken into account. Normally goods and services of this channel are not utilized by large market segments. Also, the price of the goods is subject to significant fluctuations. For example, high demand dictates an increase in the price. In addition, this particular channel has three main ways of direct selling and these include; peddling, mail-order sales and trade through manufacturer-owned stores. Peddling is an outdated version of trade between two parties and consignments are often sold in small amounts by sellers who are traveling to different places. For example, sales representative sells New Wave cosmetics to housewives by using a method of peddling. Mail-order sales are usually used to sell catalogs, books etc., except industrial and bulky goods. For example, a firm sells collectible through the use of mail-order. Also, this method of selling is normally made without eye contact. The last method undergoes through manufacture-owned stores. In this situation, the manufacturer itself is surrounded by the stores and directly supplies goods to its stores. For example, Zinger sells its sewing machines through its own stores. Due to distance of goods and products between producer and a seller, it takes an advantage to be an effective channel of distribution in its kind and these advantages are; producers pay close attention with customers and are aware of theirs' thought's and ideas that are shared with them, there are no intermediaries that could substantially reduce the profit of a company which would then result in significant loss and delivery time is shortened due to having no obstacles like middleman etc. Despite these apparent advantages, direct selling has not become a powerful channel. According to an estimate, even less than 3 percent of total consumers’ sales are made in this channel. On the other hand, technological innovations, the aid of the internet and convenient smartphones are now changing the way that commerce works significantly. The internet direct channels have proliferated that means internet companies will trade and produce such services and goods. It can be distributed directly through the internet, for example, services in the sphere of gambling or software such as antivirus programs as such.

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Wikipedia