Marketing Channels types
Marketing channels types are the ways that goods and services are made available for use by the consumers. All goods go through channels of distribution, and your marketing will depend on the way your goods are distributed. The route that the product takes on its way from production to the consumer is important because a marketer must decide which route or channel is best for his particular product.
The three types of marketing channel are as follows:
- Directing Marketing Channel.
- Indirect Marketing Channel, and
- Hybrid Distribution CHannel or Multi-Channel Distribution Systems.
1. Direct Marketing Channel
It is the shortest channel used by the manufacturer for distribution of goods or services. Under this system, the goods and services directly move from the manufacturer to the consumer with no intermediaries. The reasons for selecting this distribution channel system is as follows:
- When direct marketing is preferred by buyers.
- When the company has sufficient finance to invest in the market.
- When the competitors are using direct marketing.
- When the company is expert in marketing.
- When the company is capable of handling its marketing activities at a rational cost.
This method is the oldest of the distribution methods, which was largely applied by the manufactures to sell products and services before the emergence of the industrial revolution. Some of the Methods used by manufacturers for conducting direct distribution channel system are as follows:
- Selling at Manufacturer’s Plant: This method is also known as direct selling. It is the oldest, cheapest and most convenient method of distribution. Here, products are directly sold by the manufacturer to the consumers. Ex: Mils, ice-cream, meat, fish other.
- Door-to-Door Sales: This is the most unique way of selling goods and services. Under this methods, a sales agent visits house-to-house for selling the products face-to-face.
- Sale by Mail Order Technique: In this technique, products are delivered through the mail to the customer by taking their orders beforehand. The term ‘mail order’ refers to the purchasing of goods and services via mail delivery.
- Sales by Multiple Shops: Manufacturers dealing in perishable and non-perishable goods usually open their own shops to sell their products. In this way, manufacturers are able to provide products more quickly to the customers with better services, thus building their goodwill. It also enables the firms to analyze the market trends, buyers preferences, and styles of customers. It is a two-way communication.
2. Indirect Marketing Channel
Here, goods are distributed via intermediaries. Under this channel, there may be one intermediary such as a sole selling agent to distribute the goods through several intermediaries or, there may be numerous intermediaries used to distribute the goods through retailers or wholesalers. Retailers sell the products directly to the ultimate consumers while wholesalers reach their end consumers via retailers.
Typical Indirect Marketing Channels
- One-level Channel: In this type of distribution system, there is a single intermediary between the manufacturer and consumer. The intermediary used in this system can be either a retailer or a wholesaler. Here product or service is directly sold to the consumers.
- Two-Level Channel: In this channel, there are two types of intermediaries, i.e., wholesalers and retailers.
- Three-Level Channel: It involves three intermediaries, i.e., Wholesaler, distributor, and retailer. This channel is used to sell convenience products.
- Four-Level Channel: It involved to distribute goods and services. These intermediaries are distributor, agent, wholesaler, and retailer. This channel is used to sell consumer durables products.