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Channel Management Decision

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Marketing Channel Management – Important Issues
Marketing Management Revision Article Series
Most manufacturers of products use marketing intermediaries to sell their products to the consumers. The marketing intermediaries make up a marketing channel (distribution channel or a trade channel). The marketing channel overcomes the time, place, and possession gaps that separate gods and services from those who need or want them. Marketing Intermediaries and Their Functions

Most manufacturers of products use marketing intermediaries to sell their products to the consumers. The marketing intermediaries make up a marketing channel (distribution channel or a trade channel).

Stern and El-Ansary define: “Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption.”

The marketing channel overcomes the time, place, and possession gaps that separate gods and services from those who need or want them. Some of the functions that channel members perform are:

Information

Promotion

Negotiation

Ordering

Financing

Risk taking

Physical possession

Payment

Title

Channel Levels

A zero level channel is direct marketing between producer and consumer.

In one level channel a retailer is between producer and consumer.

Two level channels have wholesaler and retailer.

Still longer channels also exist in some industries.

Channel design decisions involve analyzing customers’ desired service levels, channel objectives of the firm.
Customers' desired service levels have researched in the areas of lot size, waiting time, spatial convenience, product variety and service backup.

The channel designer must know the service outputs desired by the target customers.

Establishing the Channel Objectives and Constraints

The channel objectives have to be

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