A marketing channel describes the entities, people, and activities required to move the ownership of products from the point of manufacturing to the point of end use. It’s the lifecycle of a product, the customer; and is sometimes called a distribution channel. Marketing itself is a process, carried out by qualified personnel who understand the customer, the market, and their buying habits. Marketing managers often define marketing in relation to these buying patterns. For example, they may measure marketing effectiveness by the ratio of sales versus new contracts.
Marketing has two components – product, the marketing strategy, and the resources needed to reach the target audience, the customer. There are several marketing channels available to a manufacturer or distributor: direct selling, retail, direct mail, online advertising, and network marketing. A key takeaway from this definition is that each channel has its own strengths and weaknesses, and it is up to each individual or company to decide which channel will serve their particular needs best.
Direct selling consists of a sales representative, a manufacturer, and independent agents who help sell the product to the consumer. The sales representative, sometimes called a “clerk,” “broker,” or “marketers,” travels to the home of a consumer and speaks directly with the consumer. The manufacturer supplies the product, the broker or agent locate a retailer for the customer, and the retailer pays the manufacturer for selling the product. In this setup, both the producer and the retailer have an interest in the outcome of the sales relationship. However, this marketing channel takes on a stronger emphasis when the product is overpriced or over-streamed. The retailer will pass on the cost of the product without receiving any incentive from the manufacturer to increase sales, and the manufacturer will pay commissions to middlemen that bring the consumer and the retailer together.
When comparing marketing channels, there are several key takeaways that companies should keep in mind. The most important is the strength of each individual or company. While the strength of the company will likely be balanced by the strength of the distributor or broker, the strength of the individual distributors or brokers will be affected by their relationship with the actual producer or manufacturer. If the producer is weak, the brokers may suffer. Conversely, if the manufacturer is weak, the brokers may also be impacted.
There are several factors that marketers should consider when setting up channels. Marketing intermediaries should be chosen based on the strength of each individual broker or distributor, their relationship with the actual manufacturer, and the strength of the overall market for the product. There are several factors that marketers should consider when setting up marketing channels. The most important is the strength of each individual distributor or broker, their relationship with the actual manufacturer, and the strength of the market for the product. There are several factors that marketers should consider when setting up marketing channels.
Some of the most important factors to consider include the quality of the brand, the channel mix, the cost, the frequency of distribution, and the lead generation potential of each channel. Brand strength refers to how well the product is being marketed and the market share the manufacturer has gained from previous marketing channels. For example, a company may be able to utilize their short term channels effectively to build a lot of sales in a certain region. However, if they are unable to take advantage of those same short term channels for the manufacturer product in that region, they have no shot at widespread success. Brand strength is also one of the primary considerations used by marketing intermediaries when determining the appropriate channels to construct their portfolio.
The quality of the manufacturer’s product and the demand for the product in the marketplace should be the basis for the type of marketing channels that are constructed. Consumers need to be properly marketed using a standardized format. While a company can choose to have both their own brand and marketing channels, it usually best to stick with only one, as it provides the manufacturer greater control over their own consumer experience. Consumers also need to be properly informed about the manner in which their money will be spent. Ensuring that each consumer is adequately informed is part of a manufacturer’s responsibility when working with an intermediary.
As marketing channels are considered, there are several key factors to consider. Although these factors may not always be in the best interest of a manufacturer, retailers often need to carefully consider which channels will be effective for their own businesses. Often, the most effective marketing channels for retailers consist of combining a number of different discount stores and wholesalers into a single platform. Creating a more unified experience for retailers means that they will be able to effectively compete with other retailers on price and, ultimately, achieve greater financial success.
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