1. Fundamental Of Marketing
MKT243
Chapter 7
Marketing Channels
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2. Slide Outline
 Marketing channels
 Channel intermediaries and their
function
 Channel Structure
 Channel strategy decision
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3. Marketing Channel/ Distribution
channel
 A set of interdependent organizations
that help make a product or service
available for use or consumption by
the consumer or business user
 A set of interdependent organizations
that ease the transfer of ownership as
products move from producer to
business user or consumer
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4. Types of Channel Intermediaries
1. RETAILER 2. MERCHANT 3. AGENT & BROKER
WHOLESALER
Buy products from Do not take any
Sell products mainly Manufacturers, and title on product.
for final users or Resells to business users Facilitate selling
Consumer market (government, wholesaler, Activities for
Or retailers) Producers
Takes title to product
Or stores
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5. Why Channel member are used?
1) Provide specialization and division of labor
2) Overcoming Discrepancies
 Discrepancy of quantity
 Temporal discrepancy
 Spatial discrepancy
 Discrepancy of assortment
3) Providing contact efficiency
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6. The Nature and Importance of
Marketing Channels
How Channel Members Add Value
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7. Channel Structure
(Consumer Product)
Producer Producer Producer Producer
Agent/ brokers
Wholesalers
Wholesalers
Retailers
Retailers
Retailers
Consumers Consumers Consumers Consumers
Direct channel Retailer channel Wholesaler Agent/broker
channel channel
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8. Channel Structure
(Business and Industrial Product)
Producer Producer Producer Producer Producer
Agents/ Agents/
broker broker
Industrial
distributor
Industrial
distributor
Government
Industrial User Buyer Industrial User Industrial user Industrial user
Direct Channel Direct channel Industrial Agent/broker Agent/ broker-
distributor channel industrial
distributor
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9. DHD2010 MKT243 Fundamental Of Marketing 9

10. Channel Design Decisions
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11. Factors Suggesting Type of
Wholesaling Intermediary to Use
Product characteristics
Product characteristics
Buyer considerations
Buyer considerations
Market characteristics
Market characteristics
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12. Factor Affecting Channel Choices
1. Market factors
-Target customer consideration
-Must consider the geographical/ location,
market size and level of competition
2. Product factors
-Nature of the products characteristics
-PLC
-Delicacy of the product
e.g: Perishable, fragile
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13. Factor Affecting Channel Choices
3. Producer factors
-Producers’ capabilities and
performance
-Managerial and financial
-Marketing resources
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