Designing and Managing Marketing ChannelsMarketing channels are set of mutually dependent organizations involved in the process of making product or service available for utilization. It is established in academic studies that Marketing channels are the means by which goods and services are made available for use by the customers.
What is designing and managing marketing channels?
Designing and Managing Marketing Channels. Marketing channels are set of mutually dependent organizations involved in the process of making product or service available for utilization. It is established in academic studies that Marketing channels are the means by which goods and services are made available for use by the customers.
What is the marketing channel function performed by middleman?
marketing channel function performed by middleman. Designing a marketing channel system entails factors such as analysing customer needs, establishing channel objectives, identifying major channel alternatives, and evaluating major channel alternatives.
Why is it important to choose the right channel for marketing?
The direction that the product takes on its way from production to the consumer is imperative because a marketer must choose which channel is best for his particular product. It can be said that channel is the link between manufactures and purchasers. Decisions about the marketing channel system are decisive for management.
What are the channel objectives of channel design?
Channel objectives differ with product characteristics. Channel design is also affected by numerous environmental factors as competitors’ channels, monetary conditions, and legal regulations and limitations. Other decisive factor in developing market channel is to recognize alternatives.
What is marketing channel?
Marketing channels are set of mutually dependent organizations involved in the process of making product or service available for utilization. It is established in academic studies that Marketing channels are the means by which goods and services are made available for use by the customers. All goods go through channels …
What is the channel used by manufacturers that specialize in producing shopping goods?
Manufacturer to Retailer to Consumer: Purchases are made by the seller from the manufacturer and then the retailer sells the products to the consumer. This channel is used by manufacturers that specialize in producing shopping goods.
Why is it important to consider some factors when choosing appropriate marketing channel such as product, market, company?
It is observed that middle man plays vital role in distribution of product in market channel. The core responsibility of intermediaries is to deliver products to customers in their desired location. To accomplish this objective, they purchase goods and store these and then ship to customers.
How to select channel members?
Selecting Channel Members: For successful management, Companies must have to choose talented channel members cautiously because for customers, the channels are the company. Producers should decide what features distinguish the better intermediaries and scrutinize the number of years in business, other lines carried, growth and profit record, financial strength, cooperativeness, and service reputation of potential channel members. If the intermediaries are sales agents, producers should assess the number and character of other lines carried and the size and quality of the sales force. If the intermediaries want exclusive distribution, the manufacturer should assess locations, future growth potential, and type of customers.
How does push versus pull marketing work?
A push strategy uses the manufacturer’s sales force and trade promotion to encourage intermediaries to carry, promote, and sell the product to customers. This is suitable where there is low brand loyalty in a category, brand choice is made in the store, the product is desired item, and product benefits are well understood. In a pull strategy, the manufacturer uses advertising and promotion to influence customers to ask intermediaries for the product, thus inducing the intermediaries to order it. This is suitable when there is high brand loyalty and high involvement in the category, people perceive differences between brands, and people choose the brand before they shop. A marketing channel executes the work of moving products from producers to consumers, beat the time, place, and possession gaps that separate goods and services from those who need or want them.
Why are channels old fashioned?
Channels can become old-fashioned when gap occurs between the existing distribution system and the ideal system to gratify customer’s needs and wants. The most challenging face of channel management is the maintenance of control over all parts of distribution flow and marketing activities.
How do marketing channels influence marketing decisions?
The marketing channels chosen by marketers influence all other marketing decisions. The firm’s sales force and advertising decisions depend on how much training and inspiration dealers need. Further, channel decisions involve comparatively long-term commitments to other firms. Holistic marketers guarantee that marketing decisions in all these different areas are made to jointly maximize value.
Why are retailers gaining power in the marketing channels?
3. category killers. 4. department stores. 5. mass merchandisers. category killers. All of the following are reasons for retailers gaining power in the marketing channels except: 1. growing size of retailers. 2. use of advanced technology. 3. increased expertise of managers.
Why do manufacturers listen to retailers’ demands?
Many manufacturers will listen to retailers’ product demands because retailers are knowledgeable about consumer needs. Such retailers are in a good position to empahisize the use of:
What is a firm’s marketing strategy?
1. a firm uses multiple promotional strategies to reach customers. 2. a firm advertises its products or services on many television stations. 3. numerous intraorganizational activities are used to provide products and services to customers. 4. a product has many features that are desired by customers.
What is the fundamental determinant of whether a firm is a member of a marketing channel?
The fundamental determinant of whether a firm is a member of a marketing channel is: 1. if the firm performs distribution tasks. 2. if the firm is considered to be important to the channel manager. 3. if the firm performs negotiatory functions.
What is coercive power?
coercive power should be used to force channel members to stay within designated territories. 2. coercive power should be the first type of power used to obtain channel member cooperation.
How to deal with channel conflict?
1. will be able to eliminate conflict among channel members. 2. will have mechanisms for detecting and dealing with channel conflict. 3. will have contracts among channel members that prevent conflict before it arises. 4. will have to deal with conflict on an ad-hoc basis as nothing else can be done.
Is Clayton Tennis Equipment a wholesaler?
producers and manufacturers; intermediaries; and final users. Clayton Tennis Equipment, a manufacturer, cannot perform distribution tasks efficiently so it uses Jackson Sports Equipment as a wholesaler to distribute its products in the Midwest. Clayton likely is less efficient than Jackson in performing distribution tasks because: 1.
What is intermediary in marketing?
This gives producers greater control over their products distribution. Intermediaries stand between the producers and final buyers in indirect channels. A channel’s horizontal dimension (width) is determined by the number of participants of any one type on the same level in the channel. The situation varies considerably from one line of goods to another. Many manufacturers find it necessary to use more than one kind of channel for the same market.
Why do we need intermediaries?
Intermediaries, because of their specialisation, experience, and scale of operations , are able to achieve more than what the organisation can in terms of reaching to the target markets.
How do channels help?
Channels create utility, improve exchange efficiency and help match supply and demand. They bring suppliers and buyers together. Each channel system has a different potential for creating sales and producing costs. The chosen channel will significantly affect and be affected by the rest of the marketing mix. A channel’s vertical dimension (length) is determined by the number of types of participants in the channel. There are no intermediaries in the most direct channel (a zero-level channel).
How are distribution channels changing?
Distribution channels are also constantly evolving with time. They keep changing with regards to their structures, functions, and their business arenas. Given this, there is also a greater possibility of channel competition and conflict. We will look at the changing channel dynamics with regards to the recent channel developments like the Vertical, Horizontal and Multi-channel Marketing Systems.
What are channel objectives?
The channel objectives are conditioned by the particular characteristics of customers, products, middlemen, competitors and environment. The firm has to select particular firms to work with or find business firms willing to work with it. It has to periodically evaluate the performance of individual channel members against their own past sales and other channel members’ sales.
Why do fast food chains use sales representatives?
That is why manufacturers of consumer durables, like fans and refrigerators, use sales representatives for institutional buyers and a dealer network for individual buyers. Earlier, fast food chains had emerged to suit the changing life-styles of certain sections of people in society.
How long is a consumer goods channel?
Channel length can vary from zero to n in case of consumer goods. Generally more lengthy channels are observed for these products. Retailers are found only in consumer goods channels. Consumer goods channels take many forms.
How do competitors affect the company’s decisions related to the selection of marketing channels?
The competitors affect the company’s decisions related to the selection of marketing channels in the following ways: Competitor’s Channel of Distribution: Sometimes the companies follow their competitors and use the same channel as adopted by them.
What is geographic concentration?
Geographical Concentration: If the potential customers are located in a vast geographic area, the company can reach them through a longer channel. The shorter channel will be preferred for the buyers located in the limited area.
What is marketing channel?
Definition: Marketing channel is a system which ensures the distribution of the merchandise from the producer to the consumers by passing it through multiple levels known as middlemen. It is also known as channels of distribution. Every product is different from one another and so are their channels of distribution.
What is sorting in business?
Sorting: The middlemen purchase goods from multiple manufacturers and segregate the products which are similar in quality, features, size, etc.
What factors determine the marketing channel?
Factors Determining the Marketing Channels. There are certain factors related to the product, the company, the competitors, the market and the environment which determines the selection of an appropriate channel of distribution for a particular product.
What is the degree of control of a company?
The degree of Control: If the company wants to regulate its sale and the market segment it caters, it will prefer a shorter channel. The companies which do not exercise much control over its products go for a longer distribution channel.
Which product needs a shorter channel?
Whereas, the product which is customised or has limited customers like industrial machinery needs a shorter channel. Perishability: The goods which are perishable require to be sold through the shorter channel. However, the products which are non-perishable can be distributed through a longer channel.
How to design a marketing channel?
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 is to be evaluated on operational, cost effective and flexibility criteria. Once the channel is designed, companies look forward to selecting partners with characteristics, which have a positive impact for the product. Channel members need to get the right amount of training as to full understand their role with respect to customer and product. Companies need to develop a mechanism as to monitor functioning of marketing channels on criteria based on total customer satisfaction. After reviewing marketing channel companies should modify them to improve functioning and productivity.
Why do companies take procurement online?
Companies are willing to take the procurement process on online for accuracy and speed. Companies exactly know each partner’s role in influencing or disrupting normal operations. Companies have developed distribution channel and network through which it supplies final product to customers. This distribution channel and network are referred …
What is Dell’s direct marketing?
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.
What is the core competency of a company?
Marketing Channels. 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.
How does a company function?
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.
How to resolve a conflict in a vertical channel?
In multi-channel conflict arise when a different channel serves the same market. The first step in conflict resolution is to identify the cause for the conflict. Next step is to manage the conflict. This can be done by setting up clear mandate for each member and their role in the overall objective of the company . Further, joint membership, diplomacy and exchange of team members are other ways in resolvi ng conflicts.
What is value network?
A network which creates partnership and value in purchase, production and selling of products is referred to as value network. Value network looks at the whole supply chain system players as partners rather than customers. The purpose of value network is to increase productivity, save cost and increase revenue.
Why are Marketing Channels Important?
As an organization prepares to bring a specific product or service to market, it must develop and define the appropriate marketing mix that will be used to promote its product in the marketplace. An effective marketing mix must account for the 4 P’s of marketing: product, price, place, and promotion.
What is the final element of marketing mix?
The final element of the marketing mix, promotion, deals with the identification of the best channels where an organization can best distribute messaging about its product to a target audience. Promotion is especially important for organizations that do direct selling, as they don’t depend on retailers or wholesalers to drive sales on their behalf. Organizations that sell their products online must identify the digital marketing channels that offer the best ROI for marketing dollars.
How does social media help brands?
Social media is one of the most cost-effective marketing channels for brands that wish to stay at the top-of-mind of prospective customers by providing interesting and informative content that drives engagement. Social media also facilitates two-way interaction between your brand and your prospects, allowing you to participate in conversations about your niche and position yourself as an authority.
How many people have an email account?
91% of American internet users have an email account, making this one of the best marketing channels for communicating directly with prospects. Email marketing can also be automated and customized to deliver targeted content based on your history of interactions with each prospect. Prospective customers can opt-in to your mailing list by subscribing on your website or filling out an e-mail submission form in exchange for exclusive access to some content or information.
What are the different types of marketing channels?
For physical products, there are four basic types of marketing channels: 1 Direct selling, where products are marketed and sold directly to consumers without a fixed retail location 2 Selling through intermediaries, where products are manufactured at the point of origin and sold to customers by downstream intermediaries such as agents, brokers, wholesalers and retail stores 3 Dual distribution, where manufacturers combine multiple types of channels to sell products to the end-user. This could mean that the manufacturer sells directly to customers and also does business with wholesalers and retailers who sell to customers through their own distribution networks 4 Reverse marketing, where products move from the customer back to the manufacturer. Typical cases of reverse marketing include recycling and product recalls
What is direct selling in marketing?
If you sell or market a digital product online, chances are that you’re working in the “direct selling” model of marketing channels. If your product can be distributed through the internet, there is no need to build a distribution network of agents and retailers that can connect customers to your product.
What is intermediary selling?
Selling through intermediaries, where products are manufactured at the point of origin and sold to customers by downstream intermediaries such as agents, brokers, wholesalers and retail stores
What Is the Purpose of Channel Management?
Channel management helps you make the most of your sales and marketing channels.
What is channel partner?
Channel partners such as distributors and wholesalers take responsibility for the distribution of your products. They help with storage and transportation to meet customer expectations.
How does a manufacturer understand the pains of all marketing channel members?
The manufacturer must understand the pains of all marketing channel members through research studies and channel audits conducted at regular intervals. The manufacturer must offer support to the channel members in the form of cooperative arrangements at various levels.
What is the importance of channels?
Another essential fact about channels is that the completion of tasks to your satisfaction or the satisfaction of other channel members is due to the routinization benefits provided by the channel. This means that the right products are always available where the customer expects to find them.
What is channel intermediary?
Channel intermediaries are groups and individuals that make it possible for customers to have access to the product. This is done so that companies don’t have to own the entire supply chain. Here are the various types of intermediaries used by companies
Why is it important to build long term relationships with distributors?
Building Long-term Relationships with partners are vital for successful channel management. From the manufacturer’s point of view, the distributors are how the product reaches the consumers.
What is marketing effort?
Marketing efforts consist of several activities, all of which, when carried out meticulously, result in successful channel management and product launch. These include market research, understanding consumer and business behavior, marketing segmentation, targeting markets, setting prices, and new product development.