The Importance of Marketing channels and Distribution channels
January 4, 2011 Leave a comment
What is the importance of Marketing channels and distribution? But before we discuss the importance of these we should first define what is marketing channel and distribution. Marketing channel is a series of ways or activities needed essentially to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption. This consists of the institutions and all the marketing activities in the marketing process. The distribution channel on the other hand is defined as a chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the ‘distribution chain’ or the ‘channel.’ Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user
Distribution is one of the most important features that one must consider in undertaking even a simple marketing. Distribution (Place) is the fourth traditional element of the marketing mix. The other three are Product, Price and Promotion. It is one of the fundamental factors specifically the 4P’s that marketers should master in marketing. Distribution channels are very important because these distribution channels are the ones who help and simplify how every consumer gets their needed and wanted products. Let me expound more on the nature of distribution channels, 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 “a passage where all the organizations products must go through between its point of production and consumption”.
I being a marketing student can’t help myself but ask why we need this “intermediaries” 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.
Another important thing we should learn is that even though the distribution channel may sound simple, it can be very complicated especially with the ever-changing demands of the market. A simple one way distribution channel can change drastically to multiple channels instantly. Marketing plan now has to be versatile and should not be directed toward one market but should have a wide outlook for every distribution channel. There are six factor that is very important: The trade channel’s price-value positioning; The trade-channel’s merchandise display; The trade channel’s delivery needs; The trade channel’s preferred advertising and promotion method; The trade channel’s packaging need; and lastly The channel’s core versus noncore product. Each of these must be carefully studied and take into consideration seriously by anyone doing marketing because this is now a reality rather than mere point of views.
Marketing channel is also very important for marketers, organizations and businesses because, how does one get his products and services efficiently to consumers that are willing to pay for it? Marketing channels illustrate the organizations that work together tog get your product and service to the end-user.
Many producers of products and services do not sell directly to their end users. They use a marketing channel. In its most basic form, a marketing channel performs the work of moving goods from producers to consumers.
A marketing channel includes one or more marketing intermediaries who perform a variety of functions. Each channel member: Provides value, performs a function and expects an economic return. Marketing channel often speak about the sale of products. However, it is not limited to the distribution of physical goods. Providers of services and ideas also benefit from marketing channel. Marketing channels offer better services at costs lower than offerings without the assistance of channel members. Organizations can achieve differentiation through their distribution channels. Each of these channels may offer different coverage, skill, and performance. They may also realize economies of scale that channels of distribution often offer. Marketing channel decisions are among the most critical decisions facing an organization. The chosen channels closely affect all other marketing decisions. The organization’s pricing depends on whether it uses mass merchandisers or high-quality boutiques. The firm’s sales force and advertising decisions depend on how much training and motivation the dealers need.
Marketing channel intermediaries exist because they offer value in making goods and services more available and accessible to the targeted markets.
Channel intermediaries offer contacts, experience, specialization, and economies of scale to organizations that cannot offer these attributes on their own. Marketing channels allow producers to realize the benefits that only larger organizations may be able to support. Each channel intermediary provides value that is very much needed for a marketing channel to operate successfully. In order for a marketing channel to successfully run each channel members must effectively execute their parts well.
Distribution and marketing Channels are very important because they are the ones who help us find the products and services that we greatly need.