December 3, 2011

Marketing Channel Management – Important Issues

Marketing Management Revision Article Series



Most manufacturers of products use marketing intermediaries to sell their products to the consumers. The marketing intermediaries make up a marketing channel (distribution channel or a trade channel). The marketing channel overcomes the time, place, and possession gaps that separate gods and services from those who need or want them.
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Marketing Intermediaries and Their Functions





Most manufacturers of products use marketing intermediaries to sell their products to the consumers. The marketing intermediaries make up a marketing channel (distribution channel or a trade channel).

Stern and El-Ansary define: “Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption.”



The marketing channel overcomes the time, place, and possession gaps that separate gods and services from those who need or want them. Some of the functions that channel members perform are:



Information

Promotion

Negotiation

Ordering

Financing

Risk taking

Physical possession

Payment

Title


Channel Levels



A zero level channel is direct marketing between producer and consumer.



In one level channel a retailer is between producer and consumer.



Two level channels have wholesaler and retailer.



Still longer channels also exist in some industries.



Channel design decisions involve analyzing customers’ desired service levels, channel objectives of the firm.
Customers' desired service levels have researched in the areas of lit zie, waiting time, spatial convenience, product variety and service backup.



The major design decisions include the type of intermediary, number, terms and responsibilities of intermediaries.



An economic criterion is to be applied in final design of the channel.



The channel management decisions include selection of channel members, motivating the channel members to promote and achieve sales, and evaluation and modification of arrangements.

Modifications of distribution system are required when the current system is not working as planned and not delivering the desired results.


References


Philip Kotler, Marketing Management (Main text for revision and article)

Article Originally posted in
http://knol.google.com/k/narayana-rao/marketing-channel-management-important/2utb2lsm2k7a/134

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