Marketing Channel

Marketing channel in brief is a funnel which acts as the pathway for the products to be transferred from the producer to the consumer. Distribution of products is one of the major aspect of the marketing channelĀ  which effectively delivers the products from the producer to its consumers. Marketing channel is also one of the major contributor when it comes to deciding the pricing strategy. It becomes very hard to negotiate at the goods production level but companies feel comfortable to negotiate at the distribution level. Channel intermediaries or the product distributors are independent businesses that assist producers in the process of making their products or services available for use or consumption (Coughlan et al., 2001). This one part, where companies decide the profits for its distribution network, which would on a later stage act as the marketing channel for the organisation. In fact distribution channel is an alternate name for marketing channel. But this is not the part where organizations can easily bargain because distributors exist because, as specialists in the performance of distribution tasks, they operate at higher levels of effectiveness and efficiency than manufacturers or end-users.

Heide and John (1988) in one of his research found that agents who are deeply involved with their clients are more likely not dependent on the suppliers and have improved their financial conditions. Organizations see agents as the key investors in their products and who create a bridge between the producer and the consumer. Although the interdependence structure influences the quality of the relationship, Kumar et al. (1995) and Li and Dant (2001) found this effect to be relatively small. This suggests a need to identify other antecedents of relationship quality.

For example: Apple orchard >Transport > Processing factory > Packaging > Final product to be sold > Distribution > Sold > Apple pie eaten

If I want to list down all the related phrases to the Marketing Channel then it would be:

– It is a funnel between the producer and the consumer.

– It is the transporter of finished goods.

– Performs sales and marketing activities.

– Distributors, marketing agents, shop keepers, sales man etc.

– Responsible for the pricing strategy.

– Reach to the consumer.

– Showrooms, shops, malls, multiplexes etc.

REFFERENCE:

  • Antia, K. D. & G. L. Frazier (2001). The severity of contract enforcement in interfirm channel relationships. Journal of Marketing, 65(October), 67-81.
  • Boyle, B., F. R. Dwyer, R. A. Robicheaux, & J. T. Simpson (1992). Influence strategies in marketing channels: measures and use in different relationship structure. Journal of Marketing Research, 29(November), 462-73.
  • Brown, J. R., R. F. Lusch, & C. Y. Nicholson (1995). Power and relationship commitment: their impact on marketing channel member performance. Journal of Retailing, 71(4), 363-92.
  • Buchanan, L. (1992). Vertical trade relationships: the role of dependence and symmetry in attaining organizational goals. Journal of Marketing Research, 29(February), 65-75.
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Abhinash Jena

Abhinash has worked in various marketing, sales, branding, and marketing functions for GPS companies including MapmyIndia Navigators (www.MapmyIndia.com). In addition to writing for Knowledge Tank articles, he also writes the expert's advice for Thesis & Dissertations and Power Designs. And holds an MBA from Indian Institute of Planning and Management, New Delhi.

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