Channels in business marketing11:55 am
Channels in business marketing
Channels play an important role in the distribution of the products in consumer and in the business market. There is a lot of difference between the channel in consumer market to that of the business market. Some of the points of differences between the two are as follows : –
- Geographical location of the intermediaries involved in the distribution process.
- In business market the size of the channel is small
- The intermediaries have different set of characteristics in both the market.
- In business market the multi channel system is often used which is not in the consumer market
There are two types of channels used in the business market broadly as classified as direct channel and indirect channel.
The direct channel consists more of the direct selling or personal or door to door selling. In this type of channel other mediums are also used like direct marketing, direct mail transfer,internet orintranet and telemarketing.
The indirect channel is the combination of intermediaries involved for the distribution of the product which includes distributors, brokers, merchants, Channels in business marketing value added resellers etc.
Developing Channel Objectives
For the effective functioning and development of the channel, it is very necessary to define the objective of the channel. The objective of the channel is based on three important things that is the objective of the market ,satisfying the needs of the customers and the features of the product category being distributed.
Factors affecting ideal channel
For the effective functionality of the channel it is necessary that the channel should run appropriately channels in business marketing. There are certain constraints that affect the ideal channel like:
- The external environment including government regulations
- Competitive strategies of the firm
- Company’s limitations
- Specification of the product
- Geographical location of the customer
Identifying Channel Alternatives
Identifying the channel involves three major issues
(1) Types of Intermediaries- there are different type of intermediaries involved in the channel like agents, brokers, manufacturer’s representative, jobbers etc.
(2) Number of Intermediaries- for deciding the number of imtermediaries there are three main strategies involved in it namely intensive with large number of intermediaries, selective with few intermediaries and exclusive with single intermediary
(3) Number of Channels- on the basis of the needs of the market segment the number of channel is decided. In business market multi-level channel is often used.
Selecting Channel Members
The selection process of the channel member consists of the following steps:
1) Creating the list of intermediaries through advertisement and making a database.
2) Visiting the selected member from the list created
3) Negotiation with the selected member
4) Making the final agreement