Sales & Distribution Management

Chapter 18: Marketing Channels

+Evolution Of Marketing Channels

+Channel Members and Their Roles

 Channel Functions

+Designing Marketing Channels

 Channel Flows and Costs

Chapter Summary

A marketing channel acts as a differentiating factor and provides businesses with a competitive advantage. Marketing channels comprise several individuals and interdependent organizations that facilitate the process of making a product or service available to end users. Marketing channels have evolved over time, from being production-oriented to customer- centric.. The evolution of marketing channels has primarily been a response to changes taking place in businesses due to the environment.

Channel members play a dominant role in moving products across the marketing channel. They facilitate the search process of buyers and sellers. They also perform the role of sorting, making transactions routine and contractual efficiency.

In addition, marketing channels perform several functions. These involves all activities that facilitate the flow of products from the manufacturer to the end user. As the product moves through different stages, different members in the distribution channel perform the functions of exchange, logistics and other supporting functions.

Designing an appropriate marketing channel is crucial to the success of a business. The channel design has to be meticulously planned taking into consideration the channel functions and other strategic business objectives. The most important elements in channel design are channel structure, channel intensity and the type of intermediaries at each level.

Marketing channels ensure the smooth flow of products between channel members. In the process, a marketing channel witnesses eight basic types of flows. These are flow of possession, ownership, promotion, negotiation, financial, risk, ordering and payment. Each flow is associated with certain costs. Therefore, it is necessary that marketing channels be designed to eliminate redundancy of flows.

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