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Types of Channels in Marketing

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Channel levels Most businesses use third parties or intermediaries to bring their products to market. They try to forge a "distribution channel" which can be defined as "all the organisations through which a product must pass between its point of production and consumption" Why does a business give the job of selling its products to intermediaries? After all, using intermediaries means giving up some control over how products are sold and who they are sold to. The answer lies in efficiency of distribution costs. Intermediaries are specialists in selling. They have the contacts, experience and scale of operation which means that greater sales can be achieved than if the producing business tried run a sales operation itself. Channel …show more content…

Terms and Responsibilities of Channel Members * Price policies: This out the price at which middlemen will get the product from the manufactures and the discount schedule. It also mentions the price at which middlemen may sell the product. * Condition of sales: The manufacturing firm stipulates mode or payment terms. For example, some firms ask middlemen to put a deposit with them. Some other firms insist payment to reach them on the day the intermediary takes physical possession of the goods. Others may accept a letter of credit as a payment mode .Credit policy of the manufacturer stipulates the period in which it must get paid. * Territorial Rights: The manufacturer should spell out the territorial jurisdiction of each of the distributor to avoid any territory jumping. This will also help in the distributor’s evaluation. * Mutual services and responsibilities – should be spelt out, particularly in case of franchised and exclusive agency channels. Channel Management decisions After a company has chosen a channel alternative, individual intermediaries must be selected, motivated & evaluated. 1. Selecting channel members For some producers this is easy; for others it 's a pain in the ass. Anyway, in order to select them,

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