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.
Functions Performed by Channel Partners
Key Takeaway
Different
organizations in a marketing channel are responsible for different
value-adding activities. These activities include disseminating
marketing communications and promoting brands, sorting and regrouping
products, storing and managing inventory, distributing products,
assuming the risk of products, and sharing information.