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Role of Marketing Channels

A marketing channel is a set of interdependent organisations involved in the process of placing products and services with consumers.

The introduction of intermediaries between the manufacturers and the final consumer is adopted by many organisations to facilitate the distribution of their products, especially where a wide distribution will provide maximum exposure of their products.

Manufacturers of snack foods, pies, cigarettes and many similar products require mass distribution in often small quantities.  This distribution makes the demand management process by one company difficult to achieve cost effective distribution.

In situations where many deliveries are made to retail outlets, the intermediaries can reduce a large portion logistics costs, and distributors endeavour to act as middle-men for many manufacturers. This increases their profitability and can lead them to offering lower distribution costs.

One disadvantage in using marketing channels is that the manufacturer relinquishes a level of control over the products, as well as increasing their distance from the end consumer.

The parties involved in the marketing channel render various key functions which increase the effectiveness of placement through the channel.  The functions are:

• • information gathering and distribution
  • product promotion
  • arranging contacts and matching products to meet buyers needs
  • negotiation of prices and financing the costs of the activities in the channel
  • physical distribution of products through the channel.