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.
Marketing Channel Strategies
Key Takeaway
Selecting
the best marketing channel is critical because it can mean the success
or failure of your product. The type of customer you're selling to will
have an impact on the channel you select. In fact, this should be your
prime consideration. The type of product, your organization's
capabilities versus those of other channel members, the way competing
products are marketed, and changes in the business environment and
technology can also affect your marketing channel decisions. Various
factors affect a company's decisions about the intensity of a product's
distribution. An intensive distribution strategy involves selling a
product in as many outlets as possible. Selective distribution involves
selling a product at select outlets in specific locations. Exclusive
distribution involves selling a product through one or very few outlets.