Using Marketing Channels to Create Value for Customers
Completion requirements
Read this chapter, which explains that a direct marketing channel consists of just two parties: the producer and the consumer. By contrast, a channel that includes one or more intermediaries (wholesalers, distributors, brokers, or agents) is an indirect channel. Firms often utilize multiple channels to reach more customers and increase their effectiveness. Some companies find ways to increase their sales by forming strategic channel alliances. Other companies look for ways to cut out the middlemen from the channel, known as disintermediation. Direct foreign investment, joint ventures, exporting, franchising, and licensing are some of the channels by which firms attempt to enter foreign markets.
Marketing Channels and Channel Partners
Review Questions
- Why are marketing channel decisions as important as pricing and product feature decisions?
- What are the benefits of looking at all of the organizations that
contribute to the production of a product versus just the organizations
that sell them?
- Why do channel partners rely on each other to sell their products and services?
- How do companies add value to products via their marketing channels?