Designing and Managing Integrated Marketing Channels
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. A normal way of functioning for a company is to procure raw materials, use its expertise in creating the product and then distribute to the customer. Companies have to convert this supply chain into a value network as to develop and maintain partnership with different stakeholders.
Core competency for a company lies in developing a product which satisfies a particular need of the market. A company if it decides to sell a product on its own than it is diverting from main line business resulting in operational difficulties. Marketing channel is ears and eyes of companies in the market. They provide companies with valuable information of customers, competitors and other players in the market. Dell’s computer exclusively uses direct marketing (the Internet and express mail service) in reaching customers are different of marketing channel depending upon the number intermediaries like retailer, wholesaler and distributor. Channels are also used by companies providing services; for example, hospital and fire station have to strategically locate for people to reach without considerable efforts.
In designing marketing channel companies analyze customer needs and preference for a given product. Further marketing channel should fall in line with overall objectives of the company in cost and desired output level. Companies then need to explore various marketing channels like direct marketing, tele-marketing, direct mail, etc. to find the right fit to reach the customer. Each channel short listed has to be evaluated on operational, cost effective and flexibility...
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