marketing channels

(noun)

A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process.

Related Terms

Examples of marketing channels in the following topics:

  • Competitive Priorities in Marketing Channels

    • A marketing channel is a set of practices necessary to transfer the ownership of goods from producer to consumer.
    • One of the ways companies gain a competitive advantage in the market is through successful incorporation and management of marketing channels.
    • An alternative term is distribution channel or 'route-to-market'.
    • For example, brands of craft tools, or large appliances would fall into this marketing channel.
    • During the marketing planning stage, marketers must choose and incorporate the most suitable channels for the firm's products, as well as select appropriate channel members or intermediaries.

  • Types of Marketing Channels

    • There are basically 4 types of marketing channels: direct selling; selling through intermediaries; dual distribution; and reverse channels.
    • Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location.
    • A marketing channel where intermediaries such as wholesalers and retailers are utilized to make a product available to the customer is called an indirect channel.
    • Dual distribution describes a wide variety of marketing arrangements by which the manufacturer or wholesalers uses more than one channel simultaneously to reach the end user.
    • Using two or more channels to attract the same target market can sometimes lead to channel conflict.

  • Selecting Marketing Channels

    • There are four bases for channel alternatives marketers consider after conducting three preliminary activities which help determine goals.
    • The type of product dictates the number of marketing channels to use.
    • For example, a perishable item must get to the consumer on a timely basis, therefore the marketing channels would have be as short and direct as possible.
    • How many retailers and wholesalers in a particular market should be included in the distribution network?
    • The need to evaluate the performance level of the channel members is just as important as the evaluation of the other marketing functions.

  • Channel Integration

    • The integration of marketing channels to varying degrees is known either as multi-channel or omni-channel retailing.
    • The integration of marketing channels involves a process known as multi-channel retailing.
    • With omni-channel retailing, marketing is made more efficient with offers that are relative to a specific consumer determined by purchase patterns, social network affinities, website visits, loyalty programs, and other data mining techniques.
    • Communications between the IT department, marketing department, and sales staff will need to be as smooth as possible with little confusion about goals and strategies.
    • A clear and thorough understanding of the customer, or target market, is required to be able to make appropriate decisions about channel integration and usability.

  • Cross-Channel Customer Experience

    • A cross channel experience involves customers accessing multiple marketing channels to make purchases and to retrieve information and services.
    • The process must be customer friendly and each marketing channel must operate in conjunction with the other channels within the system to provide seamless and efficient service.
    • To be effective, multi-channel marketing must be supported by good supply chain management systems, so that product information and prices of goods are consistent across the various customer channels.
    • Cross channel marketing offers businesses an opportunity to market with surgical accuracy enabling them to use specific channels to target different demographic segments of the market or to aim at different socio-economic groups of consumers.
    • A cross channel marketing approach lends itself to detailed analysis and enables a business to review the return on investment from each channel and to measure it against customer response and conversion of sales.

  • The Significance of Marketing Channels

    • Second, all channel institutional members are part of many channel transactions at any given point in time.
    • Finally, although the notion of a channel of distribution may sound unlikely for a service product (such as health care or air travel), service marketers also face the problem of delivering their product in the form and at the place and time demanded by the customer.
    • In all three cases, the industries attempt to meet the special needs of their target markets while differentiating their product from that of their competition.
    • A channel strategy is evident.
    • Identify the types of institutions that participate in marketing channels, and the three primary functions of these channels

  • B2C Channels

    • In B2C marketing situations, the marketer must always:
    • There are two main channels for business-to-consumer selling.
    • The other main channel for business-to-consumer selling is e-commerce, or commercial activity conducted via the Internet.
    • Sometimes known as "click-and-mortar," this channel is rapidly expanding, as more people use the Internet for purchases of both goods and information.
    • Define a business-to-consumer market, and the strategies marketers use to target consumers

  • Channel Member Characteristics

    • Thus, the channel chosen by a marketer becomes an integral part of the marketing plan.
    • Marketers must carefully evaluate how their products fit into different distribution channels.
    • There are many types of channels, and the selected channel becomes a function of the overall marketing strategy.
    • This strategy is reflexive of the 4 P's of marketing:
    • A marketer will consider the three types of distribution and select the one that most closely fits the overall marketing strategy.

  • Factors Affecting Channel Choice

    • In many instances, it is the expertise and availability of other channel institutions that make it possible for a producer/manufacturer to even participate in a particular market.
    • Channel objectives are based on the requirements of the purchasers and users, the overall marketing strategy, and the long-run goals of the corporation.
    • In cases when a company is just getting started, or an older company is trying to carve out a new market niche, the channel objectives may be the dominant force on channel choice.
    • Growth in sales - by reaching new markets and/or increasing sales in existing markets.
    • Maintenance or improvement of market share - educate or assist channel components in their efforts to increase the amount of product they handle.

  • Channel Power, Control, and Leadership

    • In the channel mechanism, power refers to the capacity of a particular channel member to control or influence the behavior of another channel member.
    • Given the restrictions inherent in channel leadership, the final question is "who should lead the channel?
    • First, if we look at the early years of marketing, the role of the wholesaler (to bring the producer and consumer together) was most vital.
    • Consequently, during this period, the wholesaler led most channels.
    • The wholesaler should lead where the manufacturers and retailers have remained small in size, large in number, relatively scattered geographically, financially weak, and lacking in marketing expertise.