When we talk about distribution channels, it means a way in which goods (goods and services) are sent until the end users consume them. Channels range from simple to complex depending on the size of the business in the market. A distribution channel involves the organization of the product from the producer to the customer. It is also known as marketing channels or marketing distribution channels or distribution channels. For any product whose main purpose is its consumption, these channels include wholesalers, distributors, agents, and retailers including dealers, brokers, and commission agents.
There are four types of marketing channels:
- Direct selling.
- Through intermediation.
- Dual distribution.
- reverse channel.
Direct selling- This includes party planning, one-on-one demonstrations, personal communication, and direct sales on the Internet, often using multi-level marketing.
Through intermediation- This includes wholesalers and retailers. There they make the material available and use it indirectly.
Dual Distribution- This involves the practice of creating a broad marketing base both directly and indirectly at the same time.
Reverse channel- All the above three steps have one thing in common i.e. flow of products from producer to end user with the help of technology this reverse channel flows from consumers to intermediaries to beneficiaries.
The strategic role of the marketing channels
The main role of marketing channels is that bridges the gap between producers and consumers. It is a link that connects producers with buyers.
It participates in sales and promotion and controls company price planning which affects marketing strategy.
It influences product strategy through branding, policies, maintenance, etc.
It is made up of various systems that help in transactions and physical exchange.
These systems have three categories
- Creator of the product
- A consumer of the product
- A Middleman (Wholesaler or Retailer)
The Channel performs three functions-
- Transactional functions
- Logistical Functions
- We are facilitating functions or helping functions. So these are the roles of the marketing channels.
The marketing channels play a vital role in developing and selecting the product’s base in the ever-growing market.
- Improving Efficiency- A proper system of distribution of channels will not be less efficient. Through this, the system will work.
- Smooth flow of commodities- It helps in the flow of goods from the creation of possession, time, and space utilization.
- Cost reduction- Similar to the terms and conditions of purchase, sales and payments also lead to cost reduction during the transaction.
- Facilitation of search- This function is carried out by agents where buyers and sellers search each other for the exchange of goods.
- Proximity to the consumer- This helps in reducing the burden on the producer as the middlemen are close to the end users of the product which helps them to gather the required information and feedback.
Working in the supply chain in the marketing channels
A supply chain acts as a link between the producer and the buyer, which may include different functions, people, organizations, information, and resources. It is an important aspect of the business so it can reduce the cost and manage time. This includes product development, marketing, operations, distribution, finance, and customer service. When any company’s supply chain is effective, it helps reduce costs and increase profits.
According to the needs of today’s market, distribution channels play an important role like other aspects of distribution analysis Some examples of competitive advantage in the market are Dell computers focus on key aspects like Nordictrack. with their competitors for a place at the top. Distribution channels play an important role and we have seen how useful and how important it is in the field of working marketing channels.