Marketing
Marketing Channels
Marketing channels refer to the various pathways through which products or services move from the producer to the end consumer. These channels can include direct sales, wholesalers, retailers, and online platforms. Effective management of marketing channels is crucial for ensuring that products reach the right customers at the right time and in the most cost-effective manner.
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10 Key excerpts on "Marketing Channels"
eBook - PDF- Chris Fill, Scot McKee(Authors)
- 2011(Publication Date)
- Goodfellow Publishers(Publisher)
Marketing Channels consist of a chain of organisations that collectively develop products and services. Each adds something of value before passing it to the next, in order that the product or service be offered in the most convenient and valued format for end-user purchase and consumption. Marketing Channels, also called distribution channels, are concerned with the interorganisational management of the processes and activities involved in moving products from manufacturers to end-user customers. The term ‘inter-organisational’ is important because marketing channel activities are concerned with the coordination of activities that are necessary to make products readily available to end-users. This coordination of the channels, especially when there are multichannel activities (Yan et al . 2011) is important if profits are to be opti-mised for all participants. Coordination between channel members is necessary to convert subassem-blies and raw materials into final products and services that represent superior value to the end-users of each channel. Each of the various organisations electing to coordinate activities performs a different role in the chain of activities. Some act as manufacturers, some as agents and others may be distributors, dealers, value-added resellers, wholesalers or retailers. Whatever the role, it is normally specific and geared to refining and moving the product closer to the end-user. Each organisation is a customer to the previous organisation in an indus-try’s value chain. Some organisations work closely together, coordinating and integrating their activities, while others cooperate on a looser, often temporary, basis. In both cases however, these organisations can be observed to be operat-ing as members of a partnership, of differing strength and dimensions, with the express intention of achieving their objectives with their partners’ assistance and cooperation.
eBook - PDF- Charles Lamb, Joe Hair, Carl McDaniel, , Charles Lamb, Charles Lamb, Joe Hair, Carl McDaniel(Authors)
- 2020(Publication Date)
- Cengage Learning EMEA(Publisher)
All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. promotion, and place), in that they provide a route for company products and services to flow to the customer. In essence, the marketing channel is the “downstream” portion of the supply chain that connects a producer with the customer. While “upstream” supply chain members are charged with moving component parts or raw mate- rials to the producer, members of the marketing chan- nel propel finished goods toward the customer, and/or provide services that facilitate additional customer value. Many different types of organizations participate in Marketing Channels. Channel members (also called intermediaries, resellers, and middlemen) negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving finished goods from the manufacturer into the hands of the final consumer. As products move toward the final consumer, channel members facilitate the distribution process by providing specialization and division of labor, overcoming discrepancies, and provid- ing contact efficiency. 13-6a How Marketing Channels Work According to the concepts of specialization and di- vision of labor, breaking down a complex task into smaller, simpler ones and assigning these tasks to spe- cialists create greater ef- ficiency and lower average production costs via econo- mies of scale. Marketing Channels attain economies of scale through specializa- tion and division of labor by aiding upstream producers (who often lack the motivation, financing, or expertise) in marketing to end users or consumers.
eBook - PDFStrategic Marketing Management in Asia
Case Studies and Lessons across Industries
- Syed Saad Andaleeb, Khalid Hasan(Authors)
- 2016(Publication Date)
- Emerald Group Publishing Limited(Publisher)
2 Since these activities can involve considerable risk and responsibility, it is clear that, in attempting to ensure the availability of their goods, producers must consider the needs of channel intermediaries as well as those of the end consumers. The Basics of a Marketing Channel System The distribution environment : As more tasks are assigned to inter-mediaries, a company producing goods tends to lose control and power over how they are traded. A key part of channel manage-ment therefore requires the recognition that networks of inter-mediaries represent social systems as well as economic ones. Consumers being more rational nowadays are more analysis-prone in their behavior; thus, they are more conscious of quality and price, and they expect more variety of products/services and easy accessibility through the distribution network. The role of intermediaries in a value chain : The value chain describes the activities involved in the manufacture, marketing, and delivery of a product/service of a firm. Intermediaries perform different functions to bridge Alderson ’ s Gaps between the producers and the customers ( Figure 1 ). They can reduce time and expenses by decreasing the contacts needed for delivery. Figure 1 shows the number of the required contacts without and with intermediaries (distributors). They can rearrange product ranges from the limited spectrum of a single manufacturer to wider assortments required 404 SAROJ KUMAR DATTA AND SHAMINDRA NATH SANYAL by the consumers. There are many types of intermediaries but they can broadly be grouped into two categories: retailers and wholesalers. Marketing Channels versus Value Network Marketing Channels are sets of independent organizations involved in the process of making a product or service available for use by the consumers whereas a value network is a system of partnerships and alliances that a firm creates to source, augment and deliver its offerings.
- D.P. Warne(Author)
- 2023(Publication Date)
- Society Publishing(Publisher)
Retailers must consider the channel mix for their businesses, as well as how well each channel is performing. The most important thing is to make sure that each channel is performing at an optimal level. If a retailer’s online store isn’t selling enough items, they can look at whether they should focus on more expensive items or less expensive items. They may also want to consider expanding into other channels such as e-commerce or direct mail. Wholesalers should also consider their channel mix by looking at how well each channel is performing overall and determining if they need to make changes based on these results (Hunt, 2013). For example, if a store is located near a college campus where students are especially interested in buying textbooks, then it might be best to present textbooks as an interesting feature on a display rather than putting them on shelves at eye level where they can be easily overlooked by passersby. To keep customers coming back to their stores again and again, retailers need to offer discounts or other incentives that encourage repeat visits by existing customers as well as new ones who may not have been aware of their existence before this point. Figure 6.9: An image showing channel design process Source: https://www.slideshare.net/NishantAgrawal14/designing-channel-sys- tems-53218088 One’s distribution channel is the arrangement of businesses, vendors, or other mediators your items must go through to reach your last shoppers. Business Marketing Management in a Business-to-Business Context 144 Depending on your trade and your items, this arrangement can incorporate wholesalers, brick-and-mortar retailers, online marketplaces, or shipping companies that take your items straightforwardly to consumers. Choosing the correct conveyance channel could be an essential choice for your trade.
eBook - PDF- Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt(Authors)
- 2018(Publication Date)
- Openstax(Publisher)
We will look first at the entities that make up a distribution channel and then examine the functions that channels serve. Marketing Intermediaries in the Distribution Channel A distribution channel is made up of marketing intermediaries, or organizations that assist in moving goods and services from producers to end users and consumers. Marketing intermediaries are in the middle of the distribution process, between the producer and the end user. The following marketing intermediaries most often appear in the distribution channel: • Agents and brokers: Agents are sales representatives of manufacturers and wholesalers, and brokers are entities that bring buyers and sellers together. Both agents and brokers are usually hired on commission basis by either a buyer or a seller. Agents and brokers are go-betweens whose job is to make deals. They do not own or take possession of goods. • Industrial distributors: Industrial distributors are independent wholesalers that buy related product lines from many manufacturers and sell them to industrial users. They often have a sales force to call on purchasing agents, make deliveries, extend credit, and provide information. Industrial distributors are used in such industries as aircraft manufacturing, mining, and petroleum. • Wholesalers: Wholesalers are firms that sell finished goods to retailers, manufacturers, and institutions (such as schools and hospitals). Historically, their function has been to buy from manufacturers and sell to retailers. • Retailers: Retailers are firms that sell goods to consumers and to industrial users for their own consumption. Chapter 12 Distributing and Promoting Products and Services 461 Exhibit 12.2 A Typical Supply Chain (Attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license.) At the end of the distribution channel are final consumers and industrial users. Industrial users are firms that buy products for internal use or for producing other products or services.
eBook - PDF- James Burrow, Brad Kleindl, Michael Becraft, , James Burrow, Brad Kleindl, Michael Becraft(Authors)
- 2016(Publication Date)
- Cengage Learning EMEA(Publisher)
INTEGRATED Marketing Channels Usually the businesses involved in a channel of distribution are independent businesses. They make their own decisions and provide the activities they believe their customers want. It is not unusual for businesses in a distribution channel to have conflicts with each other. One way for channels to work together more effectively is for a large business in the channel to take responsibility for plan-ning, coordination, and communication. The business organizes the channel so that each participant benefits and helps the other businesses perform their func-tions successfully. An administered channel is one in which one organization takes a leadership position to benefit all channel members. How do intermediaries make the channels of distribution more efficient? Success A fundamental goal of busi-ness is to increase the over-all welfare of society. One of the ways that businesses do this is by creating efficient distribution channels. This lowers costs to all mem-bers of society, including consumers and other busi-nesses. Efficient distribution channels bring product variety, move seasonal prod-ucts around the world, and improve standards of living. MANAGER’S PERSPECTIVE ON iStockphoto.com/Patrick Heagney Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. LESSON 21.2 Distribution Management 567 CHECKPOINT List three factors businesses must consider when developing a channel of distribution. UNDERSTAND MANAGEMENT CONCEPTS Determine the best answer for each of the following questions.
eBook - PDFPrinciples of Marketing
A Value-Based Approach
- Ayantunji Gbadamosi, Ian Bathgate, Sonny Nwankwo(Authors)
- 2013(Publication Date)
- Bloomsbury Academic(Publisher)
231 Chapter contentS INTRODUCTION THE ROLE OF DISTRIBUTION AS PART OF THE MARKETING MIX DEMAND CHAIN FLOWS SUPPLY CHAIN MANAGEMENT CHANNEL STRATEGY SELECTING CHANNEL MEMBERS MOTIVATING CHANNEL MEMBERS MARKETING LOGISTICS CONCLUSION Learning Outcomes The content of this chapter will help you to: ● Define a distribution channel and understand how it can operate in both a business-to-consumer (B2C) and a business-to-business (B2B) market ● Put the role of distribution into context in the marketing mix and comprehend its contribution to product and service value ● Discuss the complexity of the relationships between partner companies in the distribution chain and how they can add value for the end-customer ● Differentiate between traditional supply chains and vertical distribution systems ● Appreciate the demands of both buyers and sellers throughout a chain ● Identify the factors that contribute to an effi cient and effective distribution channel 8 VALUE-ADDED DISTRIBUTION STRATEGIES DULEKHA KASTURIRATNE & HUGH D. CONWAY UNIVERSITY OF PLYMOUTH 232 VALUE-ADDED DISTRIBUTION STRATEGIES Marketing in action J. Sainsbury A s a prime exponent of supermarketing, Sainsbury’s is at the forefront of developments in supply chain management. It currently has 21 depots around the UK and approximately 1,000 stores, includ-ing the supermarkets and convenience stores, and those stores stock approximately 30,000 products. The largest of the depots makes around 2,000 deliveries a week to 83 stores. World-class systems, updated with sales data every 15 minutes, ensure they know exactly what to deliver and where (www.j-sainsbury.co.uk). Products are sourced from all over the world: fresh food and meat from suppliers in the UK, flowers from Holland, packaged goods from China. Some of these have long shelf lives and some, especially the fresh produce, need to be in and out of the distribution depots within the same day.
eBook - PDF- Dawn Iacobucci(Author)
- 2021(Publication Date)
- Cengage Learning EMEA(Publisher)
From a customer focus, the marketer can design effectual distribution channels for the target segments to optimize the benefits they seek. Tada Images/Shutterstock.com Part 3 Positioning via Price, Place, and Promotion Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 191 Chapter 10 Channels of Distribution MANAGERIAL RECAP ● ● Distribution channels are important to marketers because they’re the link from the manufacturer to the customer. ● ● Numerous thoughtful decisions must be made in designing channel networks of partners, including the choices of intensive vs. selective channel partners. ● ● Channel entities are independent yet interdependent organizations; thus, from time to time, conflicts may arise. These are best addressed by employing good communication and trust, revenue sharing, or greater vertical integration. Chapter Discussion Questions 1. Go online and compare three franchises (e.g., franchise.org, americasbestfranchises.com, or whichfranchise.com). Choose two franchises in the same industry (e.g., fast food) and the third franchise from another industry (e.g., hair cutting). Make a table to report the fee structures (upfront, continued licensing), as well as benefits touted for franchisees of each franchise system. What would tempt you to pitch in with some friends and buy a franchise when you finish your degree? 2.
eBook - PDF- B van der Westhuyzen, J van der Merwe, B van der Westhuyzen, J van der Merwe(Authors)
- 2016(Publication Date)
- Future Managers(Publisher)
Module 2 Distribution policy After completing this module, you will be able to: • Gain insight into the role of distribution in the marketing process. • Explain the important role intermediaries play in the distribution channel and justify the necessity of intermediaries to keep the consumer satisfied. • Distinguish between the diff erent channels a product can follow from the producer to the customer. • Identify conflict between members in a channel and propose methods to obtain co-operation in the channel. • Plan the distribution for a company through formulating the distribution objectives; explain and determine the choice of an appropriate distribution channel and the choice of methods of physical distribution to fulfil the marketing activities eff ectively. • Identify the factors that influenc e the length of the distribution channel. • Explain the role of the wholesaler in the distribution channel and explain the functions and services provided by wholesalers. • Identify and describe the role of retailers in the distribution process. • Describe and define the place of physical distribution as an important link between the company and its target market. 56 N5 The Marketing Mix 1. Importance of distribution Distribution can be described as a structure that links a group of individuals or organisations together to facilitate the flow of goods from the stage where the manufacturing process is finished until it reaches the final consumer. A producer may decide to distribute directly to the final consumer or to make use of intermediaries (middlemen) to execute the distribution function. The main objective of the company is to satisfy consumer needs by having the right product available at the right time, at the right price and at the right place. Certain marketing activities must, however, be executed to have the products within consumer reach. The main objective of the distribution policy is to get the product to the consumer.
eBook - PDFThe Intimate Supply Chain
Leveraging the Supply Chain to Manage the Customer Experience
- David Frederick Ross(Author)
- 2008(Publication Date)
- Auerbach Publications(Publisher)
When designing the delivery network, strategists can pick from four possible channel models (Figure 4.3). In the first, or a direct-marketing strategy, the producer sells directly to the end-customer. Companies who deploy this type of structure essen-tially sell two types of product. The first type consists of capital equipment, configured products, or unique, difficult-to-find items characterized by long lead times, tight brand control, complex delivery, and high price. The other consists of a range of commod-ity-type products and services sold door to door (Avon) or by mail order (LL Bean), telemarketing (Pella), producer-owned stores (Sony), or the Internet (CDs/publishing). In the second delivery network strategy a producer will sell to a retailer, who in turn sells to the end-customer. This strategy is used by producers who want to maintain strong brand and pricing controls, but who are also looking for a much wider level of market penetration than a factory-direct format will permit. Such producers normally exercise a significant influence on retailers regarding product = P = Producer = C = Customer # transactions = P × C = 3 × 5 = 15 # transactions = P + C = 3 + 5 = 8 Figure 4.2 Impact of delivery network specialization. 80 n The Intimate Supply Chain display, competitive positioning, and promotion. The third delivery network strat-egy consists of a wholesale/distribution intermediary separating the producer from the retailer. Such an arrangement supports several strategies. A producer may uti-lize a wholesaler to assist in achieving levels of market penetration and distribution intensity unachievable when acting alone. On the other hand, a powerful whole-saler can leverage its strengths as an aggregator or sorter by acquiring products from many producers and selling them to a diverse group of retailers or perhaps even end-customers (i.e., W. W. Granger and McMaster-Carr).
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