Marketing channels all about marketing

1. BWIRE SEDRICK
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MARKETING CHANNELS
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2. Channel structure
Channel structure is related to the number of middlemen at a particular
point or step in the distribution channel. Channel width is a function of the
number of wholesalers and the different kinds that are used, as well as a
function of the number and kind of retailers used. As more intermediaries or
more types are used at a certain point in the channel, the channel becomes
wider and more intensive.
If only a few qualified intermediaries are needed to provide proper product
support at a particular level or at a specific location, the channel is selective.
The product, though perhaps not available everywhere, is still carried by at
least a few qualified middlemen within the same area. Finally, the
distribution becomes exclusive if only one intermediary of one type is used in
that particular area.
Distribution patterns
Another decision that concerns the manufacturer is the number of
distribution channels to be used. In some circumstances, the manufacturer
may employ many channels to move its product to consumers. For example,
it may use a long channel and a direct channel simultaneously.

3. The use of dual distribution is common if the manufacture has different brands
intended for different kinds of consumers. Another reason for using multiple
channels may involve the manufacturer’s setting up its own direct sales force in a
foreign market where the manufacturer cannot remove the original channel (e.g.,
agents) because of strategic or legal reasons.
Available alternative middle men
Available alternative middlemen actually take title to manufacturer’s goods and
assume the trading risks, so they tend to be less controllable than agent
middlemen. Merchant middlemen provide a variety of import and export
wholesaling functions involved in purchasing for their own account and selling in
other countries. Because merchant middlemen primarily are concerned with
sales and profit margins on their merchandise, they are frequently criticized for
not representing the best interests of a manufacturer. Unless they have a
franchise or a strong and profitable brand, merchant middlemen seek goods from
any source and are likely to have low brand loyalty. Ease of contact minimized
credit risk and elimination of all merchandise handling outside the United States
are some of the advantages of using merchant middlemen.

4. Middlemen are not clear cut precise, easily defined entities. A firm that
represents one of the pure types identified here is rare. Thus intimate
knowledge of middlemen functions is especially important in international
activity because misleading titles can fool a marketer unable to look beyond
mere names. What are the functions of British middlemen called a stock list or
one called an exporter or importer? One exporter may, in fact be an agent
middlemen whereas another is a merchant. Many of not most international
middlemen wear several hats and can be clearly identified only in the context of
their relationship with a specific firm.
Factors affecting choices of channel and locations
Unit Value of the Product
When the product is very costly it is best to use small distribution channel. For
example, Industrial Machinery or Gold Ornaments are very costly products that
are why for their distribution small distribution channel is used. On the other
hand, for less costly products long distribution channel is used.

5. Standardised or Customised Product
Standardised products are those for which are pre-determined and there has no
scope for alteration. For example: utensils of MILTON. To sell this long
distribution channel is used.
On the other hand, customised products are those which are made according to
the discretion of the consumer and also there is a scope for alteration, for
example; furniture. For such products face-to-face interaction between the
manufacturer and the consumer is essential. So for these Direct Sales is a good
option.
Perishability
A manufacturer should choose minimum or no middlemen as channel of
distribution for such an item or product which is of highly perishable nature. On
the contrary, a long distribution channel can be selected for durable goods.
Technical Nature
If a product is of a technical nature, then it is better to supply it directly to the
consumer. This will help the user to know the necessary technicalities of the
product.

6. Number of Buyers
If the number of buyer is large then it is better to take the services of middlemen
for the distribution of the goods. On the contrary, the distribution should be
done by the manufacturer directly if the number of buyers is less.
Types of Buyers
Buyers can be of two types: General Buyers and Industrial Buyers. If the more
buyers of the product belong to general category then there can be more
middlemen. But in case of industrial buyers there can be less middlemen.
Buying Habits
A manufacturer should take the services of middlemen if his financial position
does not permit him to sell goods on credit to those consumers who are in the
habit of purchasing goods on credit.
Buying Quantity
It is useful for the manufacturer to rely on the services of middlemen if the
goods are bought in smaller quantity.

7. Size of Market
If the market area of the product is scattered fairly, then the producer must take
the help of middlemen.