Marketing Channels

A marketing channel deals with how products gets from the producer to the consumer. There are two main ways this can be done either directly from producer to consumer or from the producer to an intermediary to then the buyer. When going from producer directly to the buyer there are more channels that need to be taken into consideration. Each producer needs to communicate with each buyer. If a producer were to go through an intermediary, they would only have to communicate with that one intermediary and the same for the buyer. They would only have one person to communicate with. Communicating with the intermediary seems like a quicker option.

There are also several channels that are used to distribute products to consumers. Each one is beneficial to different organizations depending on circumstance. Just a few of the options are either producer directly to consumer. This would include no intermediaries. Another option is from producer to retailers to consumers. This would be like Target who buys things from the manufacturer in bulk and then sells to the consumer. A third example is from producer to wholesaler to retailer to consumer. A good example of this are tobacco companies who sell their products to wholesalers who then sell these products to a large number of retailers. This helps the tobacco company get its products out to a large amount of people. There are many more channels that companies can use, these just name 3 of the most used types.

Since there are so many marketing channels, it may seem like it would be difficult to choose which channel an organization should use. Most companies base it on a variety of options. First they start with customer characteristics. The company needs to take into consideration the geographic region of their target market, and what is best for them. They then look at product attributes. The price of the product determines whether one buys it directly from the manufacturer or from a retailer. The sizes or products and characteristics all play a role. The type of organization also influences what type of marketing channel they use. The larger the firm the easier it may be to negotiate deals. They also have more money and may be able to spend more on developing a sales force while smaller firms don't have the financial means to do so. They also look at how their competition is getting their products to the consumers. Which method are they using and how is it working for them? These are only a few of the many factors they look at.

The way a producer gets their products to the consumer is very important. If they aren't able to do it in a timely non costly fashion it could be tragic for their organization. Do you think it is essentially easier to a buyer to go right to the producer, or although it may be at a higher cost, is it less of a hassle to go through retailers and wholesalers?