Channel members may include manufacturers, wholesalers agents, distributors, and retailers. Home C Channel Member. Channel Member Definition A channel member is one part of the organized network of institutions which, in combination, perform all the functions required to link producers with end users.
Please allow the use of cookies by this website to improve your browsing experience. Accept Learn more from our Cookie Policy. Read More. While a producer could decide to market and sell products directly to consumers, usually they use channel members to make the process more efficient. Selling products involves many tasks, including managing price, advertising to customers and transporting products, but producers can delegate these responsibilities to channel members that have more expertise and resources in these areas.
Each channel member performs specialized labor, adds value to the product and expects some sort of profit. Since channel members are often buying a product from the producer and hoping to resell it, they are also taking a financial risk. The number of channel members a producer involves in their marketing channel can influence the price of their product.
Related: What Is Cost of Production? Direct selling is when a producer avoids using channel members in their marketing channel and instead uses sales representatives to sell their product directly to consumers. Direct selling includes door-to-door, online and catalog sales. A marketing channel, also known as a distribution channel, is the process of channel members marketing and distributing products or services to consumers.
It is important for a producer to choose an efficient and effective marketing channel to be successful. Each member in a marketing channel fulfills a specific role that helps move a product to consumers. Producers design and develop a high-quality product. A distributor might then sell that product to a wholesaler that might then sell it in a small quantity to a retailer.
This retail store now promotes and sells this product directly to customers. Retail stores pay close attention to the buying patterns of customers at their stores and only buy the amount of products they need from wholesalers. In the same way, wholesalers only buy what they need from distributors, and distributors can tell producers how much product to make. Marketing channels can help match the supply of a product with the demand for it and minimize waste.
Consider whether the producer sells their products directly to other businesses business to business or B2B or directly to customers business to customer or B2C. It is important that producers know how to market their products effectively so that their target customers can find and buy them. Here are the differences between B2B and B2C marketing:. When conducting B2B marketing, you will have the most success if you can reach the business's decision makers.
These may be managers or owners who have the ability and authority to purchase your products. If you're marketing directly to the consumer, it is better to reach as many potential customers as possible. If a movie studio knows that the majority of their demographic rents films via iTunes, they may want to create a strategic alliance with Apple. Some channels will be more costly than others. Low cost goods function best at low cost retail outlets. Better yet, directly selling eliminates organizations between the user and the producer, and therefore can be even lower cost albeit, shipping, storing and other logistics must be considered.
Wholesalers are willing to buy large shipments of goods, but usually at a significant discount. In many cases, the overall revenue maximizing curve will be a useful tool in determining the optimal volume at the optimal price for a firm to satiate a given market demand.
Organizations create strategic alliances to build channels for consumers, and these alliances will reflect on the overall branding initiatives of both partners. If an online retailers stocks a certain type of item, users of that online retailer will equate the two brands together.
This can have an impact on how those consumers view both companies. In the current global economy, it is also useful to localize and enter new markets through effective marketing channel selections. A producer of household goods, for example, like laundry detergent could just as easily sell their goods in Europe as in the United States. The question for accomplishing this task is which retailers to work with, and how to localize the brand to be recognized and understood by foreign consumers.
Digital Channels : The modern organization is drowning in potential channels from a digital perspective. Privacy Policy. Skip to main content. Marketing Channels. Search for:. Marketing Channels in the Supply Chain. The Significance of Marketing Channels The primary purpose of any channel of distribution is to bridge the gap between the producer of a product and its user.
Learning Objectives Identify the types of institutions that participate in marketing channels, and the three primary functions of these channels. Key Takeaways Key Points The channel is composed of different institutions that facilitate the transaction and the physical exchange.
A channel performs three important functions: transactional, logistical, and facilitating. Service marketers also face the problem of delivering their product in the form and at the place and time their customer demands. Key Terms wholesale : The sale of products, often in large quantities, to retailers or other merchants.
Types of Marketing Channels There are basically 4 types of marketing channels: direct selling; selling through intermediaries; dual distribution; and reverse channels. Learning Objectives Define direct selling, indirect channels, dual distribution, and reverse channels. Key Takeaways Key Points Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location.
An intermediary or go-between is a third party that offers intermediation services between two trading parties. Dual distribution describes a wide variety of marketing arrangements by which the manufacturer or wholesalers use more than one channel simultaneously to reach the end user. A reverse channel may go from consumer to intermediary to beneficiary. Key Terms marketing channels : A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process.
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