Using Marketing Channels to Create Value for Customers
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.
Channel Dynamics
Key Takeaway
Channel
partners that wield channel power are referred to as channel leaders. A
dispute among channel members is called a channel conflict. A vertical
conflict is one that occurs between two different types of members in a
channel. By contrast, a horizontal conflict is one that occurs between
organizations of the same type. Channel leaders are often in the best
position to resolve channel conflicts. Vertical and horizontal marketing
systems can help foster channel cooperation, as can creating marketing
programs to help a channel's members all generate greater revenues and
profits.