Types of Proper Marketing Channels
Marketing channels can be described by the number of channel levels involved. Each layer of middlemen that performs some work brings the product and its ownership closer to the final buyer is a channel level.
Since the producer and the final consumer both perform the same work, they are part of every channel. We use the number of intermediary levels to indicate the length of a channel.
All of the institutions in the channel are connected by several types of flows. These include the physical flow of products, the flow of ownership, the payment flow, the information flow, and the promotion flow.
We shall now take a look at two types of marketing channels; channels for consumer goods and channels for industrial goods.
A. Channel for Consumer Goods
1) Producer to Consumers- When there are no intermediaries between the producer and the consumer, the channel is direct. This type of channel is most commonly used with organizational products, but it is also used by a few well-known consumer product companies.
2) Producer to Retailer to Consumer– The channel from producer to retailer to consumer is common when the retail establishments involved are, relatively, large.
3) Producer to Wholesaler to Retailer to Consumer- This is the most common channel for consumer goods. It employs a wholesaler to take care of the shipping and transportation needs.
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Wholesalers offer the accumulating and allocating functions that allow small producers to interact with large retailers, and vice versa.
4) Producer to Wholesaler to Jobber to Retailer to Consumer- Producer chooses to use agents (jobbers) to assist wholesalers in marketing their goods. The use of jobbers can be attributed to their specialized experiences.
B. Channels for Industrial Products
1) Manufacturer To The Industrial Customer (Buyer) – From the above diagram, manufacturers use direct marketing to distribute their products to industrial users.
This is mostly associated with complex products that require a good deal of pre-sale and post-sale support. It should be noted that post-sale support is often best handled through a direct channel.
This is because the manufacturer may be the only entity with sufficient expertise to help customers because these large accounts generate enough business to support the sales effort involved and because large customers have a habit of going through their economic weight to demand personalized service.
2) Manufacturer to the Industrial Distributor, to Industrial Customer- This is the most used channel for industrial products. Distributors take title to the goods and specialize in different lines of goods.
Some disadvantages associated with this channel are that;
(a) Distributors will want access to large accounts that the manufacturer may try to keep for itself;
(b) Distributors try to keep their product selections wide, which frequently means carrying competing lines;
(c) Sometimes distributors do not always respond to manufacturers’ advice regarding promotions, pricing, and operational policies.
This channel of distribution for industrial goods is mostly adopted by manufacturers wishing to maintain control over their products. It also applies to those goods that are sold across countries. Other factors include cultural factors, government policies, etc.
The fourth channel of distribution is adopted by manufacturers who wish to have control of the marketing activities of their products. However, some titles to the goods are given to industrial distributors, who sell to industrial customers.
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