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.
Typical Marketing Channels
Review Questions
- Why are direct marketing channels possible for some products and not others?
- Explain the value middlemen can add to products.
- Name some companies that have multiple marketing channels for their products. What are those channels?
- How do marketing channels differ around the world? Why is it sometimes hard for firms to penetrate foreign markets?