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Marketing ChannelsTYPES AND FUNCTIONS

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What is a marketing channel?

a set of intere!enentorgani"ations that hel! make

a !ro#ct or ser$ice a$aila%le

for #se or cons#m!tion %& thecons#mer or %#siness #ser'

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T&!es of (arketing Channels

Direct Channels

D#al Distri%#tion

Channels Using (arketingIntermeiaries

)e$erse Channels

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Direct Channels

The irect !ersonal!resentation* emonstration*

an sale of !ro#cts an

ser$ices to cons#mers* #s#all&in their homes or at their +o%s

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Com!anies Using Direct (arketing

Channels

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D#al Distri%#tion

Descri%es a ,ie $ariet& of marketingarrangements %& ,hich the man#fact#rer

or ,holesalers #ses more than one

channel sim#ltaneo#sl& to reach the en

#ser'The& ma& sell irectl& to the en #sers as

,ell as sell to other com!anies for resale'

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Channels Using (arketing

Intermeiaries A marketing channel ,here intermeiaries s#ch as

,holesalers an retailers are #tili"e to make a !ro#ct

a$aila%le to the c#stomer is calle an inirect channel'

The most inirect channel &o# can #se

-Pro#cer.man#fact#rer //0 agent //0 ,holesaler //0

retailer //0 cons#mer1 is #se ,hen there are man&small man#fact#rers an man& small retailers an an

agent is #se to hel! coorinate a large s#!!l& of the

!ro#ct'

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Channel Efficienc&2 3o,Intermeiaries )e#ce the N#m%er of

Channel Transactions

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)e$erse Channels

Channels esigne to ret#rn goos to their!ro#cers'

4ro,ing im!ortance %eca#se of rising !rices

for ra, materials* increasing a$aila%ilit& of

rec&cling facilities* an !assage of aitionalanti!oll#tion an conser$ation la,s'

 Also #se for recalls an re!airs'

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Key Functions Performed in

Marketing Channels

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Marketing Communications

Advertising theProduct

Providing a sales

force that offersinformation & service

to customers

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Transactional F#nctions

The& minimi"e &o#r transaction costs' Yo#onl& eal ,ith a channel !artner5 the& eal

,ith a large n#m%er of c#stomers' The&

also take the risk of holing in$entor& on

&o#r %ehalf* re#cing &o#r stockholingcosts an &o#r risk of holing #n,ante

in$entor&'

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Inventory Management

Ordering appropriate merchandiseassortment

 Maintaining adequate stock to meet

customer demand

 toring merchandise in an appropriatefacility

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Physical !istri"ution

!elivering products Coordinating delivery schedules

to meet customer e#pectations

 Arranging for the return ofdefective merchandise

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Market Feed"ack

erving on manufacturer advisory"oards

 Informing other channel mem"ers

of competitive activity Participating in test market

evaluations

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6ogistical F#nctions

Distri%#tors an ,holesalers !ro$ie anim!ortant logistical f#nction in &o#r channel

to market' Some channel !artners take

res!onsi%ilit& for the !h&sical istri%#tion of

!ro#cts to &o#r c#stomers' The& store the!ro#cts an !ro$ie trans!ort to f#lfil

c#stomers7 orers'

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Financial $isk

Offering credit Managing risks related to product

loss or deterioration

 Managing risks related to productsafety and lia"ility

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 Ae 8al#eIn certain markets* channel !artners a

$al#e to a transaction' The& ma& increase

the $al#e of a !ro#ct* for e9am!le* %&

c#stomi"ing it for c#stomers in s!ecific

in#stries // a !rocess that co#l !ro$ee9!ensi$e for &o#r %#siness'

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fin

6A(AD)ID* :IFF

6O;AS*