Marketing channel is the important subject that you have to understand. That's why I want to inform you the fundamental theories about marketing channel, they are:
1. Marketing channel comprehension
2. The definition of marketing channel
3. The goal of marketing channel
4. Types of marketing channel
5. Marketing channel concepts
6. Marketing channel trends
Let's continue on the first subject.
What is marketing channel?
Marketing channel is a place to organize an administration and operational activities and a place to facilitate a product delivery, from manufacturer to end consumer.
You should recognize another marketing channel definition. Some of Marketing channel definitions are below:
1. Marketing channel is a function and an intermediary network system (agent, trader, retailer, and so on) which is well organized to do all marketing activities (Berman, 1996).
2. Marketing channel is an external organization to perform physical delivery from producers to consumers (Rosenbloom, 1995).
3. Marketing Channel is a networking organization that connects manufacturers with end users (Craven, 1991).
The characteristics of marketing channel
1. Marketing channel is a group of organization or institution, such as agent, trader, retailer, and so on who are working together to achieve a marketing goal.
2. Marketing channel is an organization who perform such activities as planning, analyzing, organizing, and controlling all marketing channel related.
3. All the people who are associated with the marketing channel do activities (point number two) to satisfy the end consumer.
You may be interested to read my previous article about marketing channel characteristics.
Marketing channel support
In order to function optimally, marketing channel must be supported by:
1. Transportation system.
2. Storage system.
3. Appropriate Marketing channel decision.
Types of intermediary
1. Wholesalers, resellers, agent, and so on.
2. Direct selling (direct connection from producers to end consumers)
3. Independent middlemen.
4. Implement all of above.
Marketing channel basic concept
1. The function of physical distribution is supply and keep the products. There are several things related such as transportation system, inventory system, warehousing, and service of the order.
2. There are several reasons why producers do direct selling, they are:
a. They sure they have great opportunities to provide a competitive advantage.
b. They have significant opportunities to get a higher profit margin.
c. They have a chance to get a huge volume of purchasing.
d. Centralized buyer location. Through this condition, they can save money from spending in physical distribution activities (transportation, delivery activities, and so on).
e. They can provide a simple buying process that is endeared by a customer.
f. The direct selling strategy is loved by producers, especially producers that launch a product in the first phase at PLC phase (product life cycles phase)
3. Channel management is an important thing to consider in the marketing channel, especially for managing and controlling a relation between all channel entities (wholesaler, retailer, agent, and another type of intermediaries).
Marketing channel trends
A very tight competition impacts indirectly to the marketing channel. Therefore, you can notice some trends in the marketing channel.
1. You must consider the power of channel so that you have to develop a product that can be marketed in the current marketing channel.
2. A retailer can utilize a catalog (both online catalog and offline) to market the product.
Online catalog can be implemented by creating a landing page, squeeze page, pop up page, and so on.
3. Many companies have strengthened strategic alliance or strategic partnership to deliver a competitive advantage.
4. Organizing a database is important, especially for manufacturers who implement direct marketing/direct selling strategy.
