The Nature and Importance of Marketing Channels

2905 WordsOct 7, 201212 Pages
The Nature and Importance of Marketing Channels Few producers sell their goods directly to the final users. Instead, most use intermediaries to bring their products to market. They try to forge a marketing channel (or distribution channel)—a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. A company’s channel decisions directly affect every other marketing decision. Pricing depends on whether the company works with national discount chains, uses high-quality specialty stores, or sells directly to consumers via the Web. The firm’s sales force and communications decisions depend on how much persuasion, training, motivation, and support…show more content…
Thus, intermediaries play an important role in matching supply and demand. In making products and services available to consumers, channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them. Members of the marketing channel perform many key functions. Some help to complete transactions: • Information: Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange. • Promotion: Developing and spreading persuasive communications about an offer. • Contact: Finding and communicating with prospective buyers. • Matching: Shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging. • Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred. Others help to fulfill the completed transactions: • Physical distribution: Transporting and storing goods. • Financing: Acquiring and using funds to cover the costs of the channel work. • Risk taking: Assuming the risks of carrying out the channel work. And a new item that has been added to the list of functions to be performed within the supply chain is environmental sustainability. Take the case of Toronto-based Grand &
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