Marketing Channels

Topics: Marketing, Supply chain management, Supply chain Pages: 11 (3084 words) Published: October 31, 2010
Marketing channels
Term paper

Prepared by: Essam Eldin Khater

• Marketing Channels literature review  
To reach a target market, the marketer uses marketing channels.

The marketer uses distribution channels to display, sell, or deliver the physical product or service(s) to the buyer or user. They include distributors, wholesalers, retailers, and agents.

The marketer also uses service channels to carry out transactions with potential buyers. Service channels include warehouses, transportation companies, banks, and insurance companies that facilitate transactions. Marketers clearly face a design challenge in choosing the best mix of communication, distribution, and service channels for their offerings.

Successful value creation needs successful value ,delivery, Holistic marketers are increasingly taking a value network view of their businesses; instead of limiting their focus to their immediate suppliers, distributors, and customers, they are examining the" whole supply chain that links raw materials, components; and manufactured goods and shows how they move toward the final consumers. Companies are looking at their suppliers’ suppliers upstream and at their distributors’ customers downstream. They are looking at customer segments and considering a wide range of-different possible means to sell, distribute and service their offerings.

In managing intermediaries, the firm must decide how much effort to devote to push versus pull marketing. A push strategy uses the manufacturer's sales force, trade promotion money, or other means to induce intermediaries to carry, promote, and sell the product to end users. Push strategy is appropriate where there is low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood. In a pull strategy the manufacturer uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries, thus inducing the intermediaries to order it. Pull strategy is appropriate when there is high brand loyalty and high involvement in the category, when consumers are able to perceive differences between brands, and when they choose the brand before they go to the store.

Most producers do not sell their goods directly to the final users. Between them stands a set of intermediaries that perform a variety of functions. These intermediaries constitute a marketing channel (also called a trade channel or distribution channel). Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption.2 why would a producer delegate some of the selling job to intermediaries? Although delegation means relinquishing some control over how and to whom the products are sold, producers gain several advantages by using channel intermediaries.

• Marketing Channels from supply chain management perspective

Whereas marketing channels connect the marketer to the target buyers, the supply chain describes a longer channel stretching from raw materials to components to final products that are carried to final buyers. For example, the supply chain for women’s purses starts with hides, tanning operations, cuts operations, manufacturing, and the marketing channels that bring products to customers. This supply chain represents a value delivery system. Each company captures only a certain percentage of the total value generated by the supply chain. When a company acquires competitors or moves upstream or downstream, its aim is to capture a higher percentage of supply chain value. The supply chain, which stretches from raw materials to the final products for final buyers, represents a value delivery system. Marketers can capture more of the supply chain value by acquiring competitors or expanding upstream or downstream. Successful SCM requires a change from managing individual functions to...
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