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The nature of marketing channels
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. A marketing channel is a useful tool for management.
Roles of marketing channel in marketing strategies:
* Links producers to buyers.
* Performs sales, advertising and promotion.
* Influences the firms pricing strategy.
* Affecting product strategy through branding, policies, willingness to stock.
* Customizes profits, install, maintain, offer credit, etc.
An example of this is an apple orchard: The farmer harvests the apples from and the orchard puts them on the truck to be transported to the processing factory for packaging and the final product is sold to the store, where a customer purchases and easts the apple pie.
An alternative term is distribution channel or route-to-market. It is a path or pipeline through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them flow in the opposite direction (from consumer to the vendor). A marketing channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent) intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer.
Short term channels are influenced by market factors such as: business users, geographically concentrated, extensive technical knowledge and regular servicing required and large orders. Short term products are influenced by factors such as: perishable, complex, and expensive. Short term producer factors include whether the...
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