What is channel marketing? Definition, strategy, examples

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In this session, we will be discussing what is channel marketing, and also discussing channel definition, types, importance, benefits, strategy, channel structure, why are marketing channels important, channel partners, omnichannel marketing, cross channel marketing, examples.

In the past, the only way to market a product was through advertising. In the 21st century, companies have a wealth of options on how to advertise their products.

Some companies spend more money on marketing their products through sports and entertainment. Some companies put billboards on busy roads and highways to get the attention of potential customers.

What is channel marketing?

A marketing channel is a path that leads from the manufacturer to the consumer. It is a series of steps, one after another, that a product goes through from being created to being purchased by the consumer.

In order to reach its target market, a manufacturer must utilize effective marketing channels. The marketing channel begins with a person or organization that has an idea for a product.

In other words, A marketing channel is a way in which a product or service reaches the consumer.

For example, an automobile manufacturer may choose to sell their cars through a network of independent dealers or through a single manufacturer-owned dealership. In addition, the manufacturer can market its cars through a variety of advertising channels including television, radio, newspapers, magazines, billboards, and the Internet.

Definition of marketing channel

A marketing channel is a set of institutions that are involved in the process of making a product or service available for use or consumption by a consumer or business user.

The term usually refers to the people and firms that play a role in the distribution of goods and services, either directly or indirectly.

The concept of the marketing channel was developed by E. Jerome McCarthy in 1960.  He defined it as “a communication path that leads from the manufacturer to the point of purchase.”

Types of marketing channel

A marketing channel is the way that the marketer delivers his marketing message to the market. Marketing channels can be physical or virtual.

The marketer must consider different types of marketing channels, such as direct marketing, mass media, intermediary distributors, and word of mouth, among others.

These different types of marketing channels each have their strengths and weaknesses.

  • Manufacturer to Consumer
  • Manufacturer to Retailer to Consumer
  • Manufacturer to Wholesaler to Consumer
  • Manufacturer to Agent to Wholesaler to Retailer to Consumer

Manufacturer to Consumer

In the earlier days of marketing, manufacturers used to sell their products directly to the consumers. At that time, there were not many middlemen involved in the process. such as wholesalers, agents, retailers, and resellers.

But, as the business grew, manufacturers realized that it was not possible for them to directly connect with all the consumers all the time. They also realized that they could not produce a large number of products in a single go.

Advantages of the manufacturer to consumer

The manufacturer-to-consumer marketing channel provides the opportunity for a manufacturer to offer the consumer a wide range of options. This provides the manufacturer with a greater opportunity to build brand recognition, brand loyalty, and brand trust. This also allows the consumer to purchase the product directly from the manufacturer, which may save the consumer money and provide a better consumer experience.

Disadvantages of Manufacturer to Consumer

especially when manufacturers are small and/or have few resources to help them. As the manufacturers move towards direct-to-consumer, they will have to change or eliminate their marketing channels to increase profitability.

This change may require them to focus on building a loyal customer base, in turn, driving growth from within the customer base. This requires a large amount of work on the part of the manufacturer, and there is little time to gain this loyal customer base.

Manufacturer to Retailer to Consumer

Manufacturer to retailer to consumer is just another word for the Marketing channel. It is an information exchange between a manufacturer or producer and its customer to sell a product. The retailer becomes the customer. The retailer is the one who buys or receives the product from the manufacturer and then sells it to the end consumer.

Advantages to Manufacturer to Retailer to Consumer

Advantages to Manufacturer to Retailer to Consumer, all three channels are a means of marketing a product. However, as the product grows, the channels used to market the product will also change. The three most common channels of marketing are Advertising, Direct Marketing, and Retail. Advertising is the process of advertising or promoting your product.

Disadvantages to Manufacturer to Retailer to Consumer

Manufacturers offer lower prices to retail stores in order to increase demand, but this often results in lower profits for the store.

Manufacturers often have strict agreements with retailers that prevent them from selling directly to consumers. In addition, consumers are often confused by a wide variety of options, so they end up buying products from retailers who represent the manufacturer.

This reduces the number of manufacturers who sell directly to the consumer, which might result in lower overall profits for the manufacturer.

Manufacturer to Wholesaler to Consumer

A marketing channel is a route that goods travel from the point of manufacture to the final consumer. The marketing channel is the link between the place of manufacture or distribution and the consumer.

It encompasses the marketing process as a whole but includes the distribution of goods, the marketing activities undertaken by people in their capacity as wholesalers, manufacturers, or retailers, and the marketing processes involved in selling goods.

The marketing chain is therefore the route by which the product passes through the marketplace to the consumer.

Advantage of a Manufacturer to a Wholesaler to a Consumer

The advantage of a manufacturer to a wholesaler to a consumer is that the manufacturer has a more complete idea of the market for its product than the wholesaler.

If a manufacturer knows exactly how many wholesale outlets there are, it can make the best decision on where to buy the product at the lowest price.

Also, the manufacturer often has more capital than the wholesaler, which allows the manufacturer to purchase the product at a lower price. Therefore, the manufacturer sells the product at a lower price.

The disadvantage of the Manufacturer to Wholesaler to the Consumer

The disadvantage of the manufacturer to wholesaler to the consumer is that the customer is not in control of the products and services that they wish to purchase. This happens when the organization sends the message to the customer without the customer being involved.

Manufacturer to Agent to Wholesaler to Retailer to Consumer

The different levels of marketing channels are the manufacturer, agent, wholesaler, retailer, vendor, and consumer or the customer. Each level is connected to the next and to the one before and so on.

For example, a consumer is connected to a vendor or vendor to a retailer and retailer to a wholesaler, or wholesaler to agent, and agent to the manufacturer in a chain of selling.  

The main reason for this channel is to get rid of the middleman and get the product to the consumer directly. The manufacturer uses the agent to sell the product to the wholesaler and the wholesaler, in turn, sells the product to the retailer where it is then sold to the consumer.

Importance of Marketing Channel

This was the biggest question in the marketing industry. If the channel was important. What were the channels of communication being used at the time? For example, if the marketing channel was postcards.

A marketing channel is an effective way to promote a product for the purpose of making it known to the consumer that a product exists and that it is available for sale to them.

This can be done by advertising or by selling products, either directly or indirectly. If the products are sold by a company or other business entity, then the process of marketing is usually done by the company or business, but marketing can also be done by a third party who is paid to promote the product.

In a digital world, marketing is more important than ever because this type of marketing can be done in a variety of ways and can be done with little to no cost.

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