CHANNEL MANAGEMENT AND ITS LEVEL

Channel Marketing is a process wherein the company develops various marketing techniques and sales strategies to reach the customer base in the widest possible way. The channels are nothing but the ways or outlets for the company to market and sell its products. It’s a way of transferring the ownership of goods from the point of production to the end users that is consumers. The ultimate aim of any Organization is profit maximization and to do that they need a strong relationship between customers and its products.

Channel allows the manufacturer or wholesaler to reach its end user by using more than one distribution channel. The producer at the same time can reach its customer through website or sell to another company or retailer that will reach the consumer but by using different channel, i.e., a store.

Example :- Take breakfast cereal. The channel begins on a field of wheat, where producer produced it. The grain then travel to a grain dispensary, then it went to cereal factory, through a grain distributor and then finally it went to the shelves of stores and then ends up in the bowl of someone’s kitchen table, and finally the channel gets complete.

IMPORTANCE OF CHANNEL MANAGEMENT

Ø  It helps company in developing a channel through which it can sell products and provide services to its customers.

Ø  Its aim is to establish communication between company and customers, and to do so its necessary to segment the channel according to the needs, buying pattern of the customers.

Ø  It’s a useful tool for management as it helps in creating an effective and well planned marketing strategy.

ROLES OF MARKETING CHANNEL IN MARKETING STRATEGIES

Ø  It links the producers to buyers.

Ø  It helps in influencing the firm’s pricing strategy

Ø  Affects product strategy through branding, policies.

Ø  It customizes profit of the company.

Channel Marketing involves finding new partners that help the producer to transfer the goods to the customers, because there are very few producers who directly sell their goods to the customers directly but major of the producers sold their goods through intermediates. Some company uses their internal channel or some external channel.

 LEVELS OF DISTRIBUTION CHANNEL ARE AS FOLLOW:-

PRODUCER  à CUSTOMER

Under this the producer sells its goods or provide services directly to the consumers with no involvement of any intermediary or wholesaler or a retailer, an agent. The consumer can directly go to the producer to buy the product,. These type of marketing channel is beneficiary for farmers.

PRODUCER àRETAILERà CONSUMER

These is the another level of channel marketing where the goods manufactured by the producer are not directly sell to the consumers but through Retailers. Retailers like Walmart, Bigbazar buy the product from the manufacturer and sell them directly to the consumers. These channel is good for goods like clothes, shoes, furniture, tableware. Since customer needs more time to buy these products. Intermediaries are essential due to their professionalism and ability to offer the product to the target market. Thus they play an important role in maintaining a correspondence between demand and supply.

PRODUCER àWHOLESALER/DISTRIBUTORà CUSTOMER

Wholesalers like Coscto buy the products from the manufactures and sell them directly to the consumers. In this level of channel consumers can directly buy goods from the wholesaler in bulk. Purchasing from wholesaler decreases the price of the goods because the extra cost such as service cost, or sales cost are cut by the wholesaler that are charged by the retailers. But sometimes wholesaler go through retailers and then to consumers to increase the profit margin of the product.

PRODUCERà AGENT/BROKERà WHOLESALER OR RETAILERà CUSTOMER

This level of channel marketing involves more than one intermediaries before the product gets into the hands of end user. This middle man is known as agent, who negotiated between the manufacturer and the seller. Generally a need of agent arises when the goods are perishable in nature and manufacturer wants to get its product into the market quickly. So the agent went to the retailer with the goods or he can use another route that is he went to wholesaler, then wholesale went to the retailer and then finally it reaches to the end consumer. The cost of this type of product is more because of many channels and profit maximization is more.

Thus Channel Marketing and its management is very necessary for any organization as this enables the manufacturer to sell its product and services to the consumers. Without proper channel of distribution it becomes difficult to exist in the market. Thus Channel Marketing plays a very crucial role in terms of making product available to the consumer.