They narrow down the gap between producers and consumers both ecoomically and efficiently. These intermediaries reduce the number of transactions involved in making products available from producers to consumers.
For instance, there are four producers who are targeting to sell their products to four customers. If there is no distribution channel involved, then there will be sixteen transactions involved. But if the producers use distribution channels, then the number of transactions involved will be reduced to eight four from producer to intermediary and four from intermediary to customer , and thereby the transportation costs and efforts will also be reduced.
The channels offer products in required assortments: Just like the producers have expertise in manufacturing products, similarly the intermediaries have their own expertise. The wholesalers specialize in moving and transferring products from various producers to greater number of retailers. Similarly, the retailers have expertise in selling a wide assortment of goods in less quantity to a greater number of final customers. Marketing channels are an effective way of ensuring that products reach their intended customers.
Marketing channels are usually integrated in order to ensure increased profits. They are important and allow a business to accomplish its original goal. A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption.
It is the way products get to the end-user, the consumer; and is also known as a distribution channel. It is very important because product in one place while the consumption scattered in many place. So there is big gap between producers and the consumers. So through channels of distribution can only fill the gap.
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Once customers realize that, they will value your products less. The problem with using a distribution channel is that you have no control over products.
This means that you may not control the image that customers have of your brand. Sometimes there might be delays in transportation. Because of this, your products can lose their value before they reach customers. If this persists, it will lead to losses. Some distribution channels require several participants. In such cases, it can be difficult for you to understand. Adding more members to a marketing channel creates more delays in delivery.
This will also reduce how much customers value your products. If you have too many intermediaries in a marketing channel, it can increase expenses.
Paying every intermediary will cost you a lot. This extra revenue, which can be used for expanding your business. This affects customers, as they have to pay a very high price for your products. Sometimes, channel members may have conflicts of interest.
This happens whenever roles and responsibilities overlap. Once conflicts arise, it can lead to great loses which can affect your business.
Conflicts usually arise when there are several distributors. Management becomes a problem. Problems with supply chain management are responsible for causing conflicts.
These conflicts, if not resolved, can lead to serious losses. Always evaluate the advantages and disadvantages of using a distribution channel.
This all comes down to what your ultimate goal is. The type of business that you have can also be a determinant factor. If you decide to use a marketing channel, analyze what problems you may encounter. This will help you to manage your distribution channel. In addition, this way you can minimize any losses that may occur. This is a guest post by Emily Watts. She enjoys writing and is passionate about helping other people. She has also worked as an editor for her local newspaper.
In her free time, Emily enjoys outdoor activities such as hiking and taking walks. Her love for writing started in elementary school and she enjoys her work every day. They are responsible for all type of web content including blog, social posts, videos, documentation etc. Types of marketing channels include: Direct selling — manufacturers sell directly to customers; this is mostly used by online stores.
Selling through intermediaries — making products available for customers through wholesalers and retailers. Dual distribution — more than one marketing channel is used to deliver products to consumers. Reverse channels — it is the opposite of the others; it flows from the consumer to an intermediary and then to the beneficiary.
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