Do You Know how a product goes Into Market?
A product goes into the market by different Marketing channels. The process of going a product from Manufacturer to retailer is distribution channels. So, Marketing Channel is simply called as a distribution method of products, in which a company can transfer their goods from one person to another through different mediums. In Simple words “building a connection between company to customers”.
The distribution channel of a business is an important key element of any business. The Success of a Manufacturer business depends on its Distribution channel.
So let’s read the full guide on What is marketing and how you can use marketing channel for your business.
What’s in it for me?
- MARKETING CHANNELS
- ROLES OF MARKETING CHANNELS
- TYPES OF MARKETING CHANNELS
- EXAMPLES OF MARKETING CHANNELS
- 4 CHANNELS OF DISTRIBUTION
1. Marketing Channel
Marketing Channel is simply called as a distribution method of products, in which a company can transfer their goods from one person to another through different mediums. In Simple words “building a connection between company to customers”.
It’s a way through which product reaches to consumer and due to this, it is also known as a Distribution channel.
It is a very useful tool for managing and is essential for developing a productive and strategic marketing strategy.
Dual Distribution Channel is another type of marketing channel. It’s a less conventional channel that helps wholesaler to reach consumer using more that one distribution channel.
In this type of channel, he can either reach to the consumer directly or simply can sell it to another company or retailer who will then sell it to the consumer.
2. Roles of Marketing Channel
The major role of a marketing channel is that it removes the gap between producers and consumers. It is a connection that connects producers to buyers.
It takes part in sales and adverting and controls the firm pricing planning which influences the marketing strategy.
It affects the product strategy by branding, policies, maintenance etc.
It is composed of different systems that help the transaction and physical exchange.
These systems have three categories
- Creator of the product
- A consumer of the product
- A Middleman (Wholesaler or Retailer)
The Channel performs three functions-
- Transactional functions
- Logistical Functions
- Facilitating functions or helping functions.
3. Types Of Marketing Channel?
There are many types of marketing channels which are used according to different situations of companies, but now we have to understand the Main component of Marketing channels.
- Direct Selling
- Intermediaries Selling.
- Direct Selling: If You Are dealing directly with customers without any interference of any mediocre is called direct selling. There are many pros and cons of direct selling we will also discuss this here.
- Direct Selling Benefits:
- Fewer Expenses
- More Profit
- Can Be Sold On Less Price
Direct Selling Cons:
- Need to Create Brand Awareness
- More Hustle in Marketing
Example of Direct Selling
- Online Selling (eg. Xiaomi)
- Own Brand Outlet (eg. Royal Enfield)
Intermediaries Selling – Intermediaries selling is a channel in which a company can take help from the Broker or Agents, Wholesaler and Retailers to reach their customers.
It also seems as a Middleman in a Company.
1. Broker – A broker is someone who can charge the fee from the company for selling their products.
2. Wholesaler – A person who purchases products in large quantity and sell those products to the retailers.
3. Retailers – A person who can sell the product to the Consumer.
Intermediaries Selling Benefits:
- Easily available to the customers.
- Fast Expansion & Time-saving.
- Less Marketing Efforts.
Intermediaries Selling Cons: Increase in price of products.
4. Examples of Marketing Channel
- Wholesalers – These are the middle people who handle the goods in bulk quantity. They usually sell goods to retailers and sometimes to consumers directly.
- Internet direct– Internet created a deep effect on communication, entertainment, buying and selling and now in the distribution channel.
- Catalogue direct – It is a channel in which consumer selects or order products from a printed or online catalogue.
- Sales team – Sales team create awareness for a product among the potential customer and prepare him for interaction with the sales team.
- Value-added Reseller -It is a type of company or reseller which adds some value and features to the existing product and resells it.
- Consultant – Consultant is an advisor who works for the company to create and implement strategies that might be helpful to the company
- Retail sales agent – A retail sales associate’s job to look for all sales activities and sales associate job duties like greeting customers, answering questions, offering assistance etc.
- Manufacturer’s representative – Manufacturer’s Representative is a person, sales agency or company that sells Manufacturer’s products to retailers or wholesalers.
5. 4 Channels of distribution
There are 4 types of channel distribution. All of them are mentioned below and a bit of knowledge about them.
1. Direct Selling – In direct selling people sell products to the consumers directly. In direct selling, Peddling is the oldest form. In modern direct selling, the sales are made through one on one demonstration, personal contact agreement or internet sales.
According to the reports of The World Federation of Direct Selling Associations (WFDSA), its 59 regional member associations considered for more than US$114 Billion in retail sales in 2007, by the activities performed by more than 62 million independent sales representatives.
According to the reports of The United States Direct Selling Association (DSA) In 2000, 55% of adult Americans sometimes purchased goods or services from a direct seller and 20% reported that they were currently(6%) were (14%) a direct seller.
2. Selling through intermediaries – In Intermediaries channel of distribution intermediaries such as wholesalers and retailers are involved and they are responsible for selling the products.
(Producer/manufacturer=>agent=>wholesaler=>retailer=>consumer) is the most indirect channel when many small manufacturers and retailers are used.
- Dual distribution –When wholesalers want to use more than one channel at the same time to reach the user at the end or consumer or user then it is known as dual distribution. They may sell directly to the consumers or to the companies or retailers for reselling. The best example of dual distribution is Format franchising.
- Reverse channels – In all of the above channels you might have seen one common thing that is flow. In every type of channel, channel flows from producer to the intermediate to consumer or user. But due to the technology, another flow has been made possible. It might also go in the reverse direction and might go from consumer or user to intermediate to the beneficiary or the one who benefits from it. In reverse, you will find no producer, only a beneficiary or user.
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