A marketing channel describes the entities, people, and activities needed to move the ownership of products from the initial point of production to the final point of sale. It’s the pathway by which products are made to the consumer, the client; and is sometimes called a distribution channel. Marketing and distribution work together to increase sales, drive sales momentum, and expand customer base. Both can be integrated in different ways depending on the goals and the nature of product or service.
One important consideration in defining marketing channels is pricing and profit margins. The price must be competitive with similar offerings from other manufacturers or distributors, and price must allow for a reasonable return on investment. Other factors include brand loyalty, the product’s profile, and the level of service provided. Other considerations include timing, costs, quality, scale of production, customer penetration, level of brand protection, and the relationship between channel and manufacturer.
Major marketing channels are formed by broad categories of activities. These channels include direct sales, direct marketing, merchandising, e-retailing, licensing, and electronic wholesale and retailing. In addition, there are multilevel channels, such as franchising, franchise associations, consignment purchasing, placement agents, and membership organizations. The structure of channels varies by type of product or service and by the type of retailer or manufacturer.
Direct sales channels are the most prolific and profitable marketing channels, since they provide products at a low margin and are easily accessible. These include direct shipping and consignment stores, through a network of affiliates, directly to customers, or by using a distribution service. The goods sold in these channels are sold at prices that are far below the cost of production. Consumers typically make purchases from these marketing channels once and may not make another purchase for years to come.
Direct marketing channels require the approval and assistance of consumers. An important aspect of these channels is that they generally require the permission and approval of consumers before a company can start selling to them. This is necessary for distributors to legally operate their businesses. If distributors do not comply with the law, they are not lawfully able to sell to consumers. Once approved, however, these marketing channels provide goods to consumers at low prices and at a fast rate.
An intermediary is a retailer who acts as an intermediary between two manufacturers and retailers. They commonly work through trade organizations or through the manufacturers’ organizations. Through an intermediary, companies can sell directly to consumers and reach more consumers. Through these channels, a manufacturer can gain access to markets that would not be available without the help of an intermediary. intermediaries have the duty of maintaining a level of confidentiality in relation to the nature of their business and in particular, their relationship with the manufacturer.
There are several factors that contribute to establishing marketing intermediaries. Factors such as market penetration, sales volume and the manufacturer’s brand name are the most important ones. Other factors include the company’s financial position, access to market and size of the market, access to distribution channels and the manufacturer’s brand name. These factors are used to establish whether a company has the ability to provide quality products to consumers.
Once established, a marketing channel provides an essential link between the manufacturer and the customer. intermediaries play an important role in ensuring a healthy customer service relationship between the company and its customers. These channels allow a manufacturer to promote and sell its products to consumers at a reasonable price and at a faster rate. Without these intermediaries, companies could not compete effectively on the market.
One of the most popular marketing channels today is through search engine optimization (SEO). Search engine optimization or SEO is a process in which website owners make their websites more visible to potential customers through prominent placement in search engine results. The main goal of SEO is to attract and retain the best customers by improving brand recognition and attracting new ones through effective advertising campaigns.
Another successful channel marketing strategy is through group or network marketing. In this strategy, companies recruit network partners that would help them market their products. This form of marketing requires extensive research and planning. It also takes considerable skill and experience in order to recruit and retain good network partners. Good retailers that are into this type of channel marketing are retailers that are into wholesaling, or suppliers that specialize in specific products.
Lastly, another way of making your products known is through social media channels. Examples of social media channels are Facebook, Twitter, LinkedIn, Pinterest and Google+ among others. These are great marketing channels because they allow retailers to directly advertise their products. Companies who are into email marketing channels can also use Facebook and Twitter to directly advertise their products.