These are time, form, place, and ownership. There are four forms of utility, or value, that channels offer. In other words, they have some sort of capabilities the producer needs: contact with many customers or the right customers, marketing expertise, shipping and handling capabilities, and the ability to lend the producer credit are among the types of help a firm can get by utilizing a channel partner. These organizations are called intermediaries (or middlemen or resellers).Ĭompanies partner with intermediaries not because they necessarily want to (ideally they could sell their products straight to users) but because the intermediaries can help them sell the products better than they could working alone. However, many other products and services pass through multiple organizations before they get to you. No one else owns, handles, or remarkets the haircut to you before you get it. When you get a haircut, it travels straight from your hairdresser to you. The simplest marketing channel consists of just two parties-a producer and a consumer. By contrast, a weak channel partner can be a liability. In turn, Walmart wants to work with strong channel partners it can depend on to continuously provide it with great products that fly off the shelves.
A strong channel partner like Walmart can promote and sell the heck out of a product that might not otherwise turn a profit for its producer. Companies strive to choose not only the best marketing channels but also the best channel partners. The firms a company partners with to actively promote and sell a product as it travels through its marketing channel to users are referred to by the firm as its channel members (or partners). In other words, how companies sell has become as important as what they sell 1. If you can’t get your product to them when, where, and how they want it, they will simply buy a competing product. Today, marketing channel decisions are as important as the decisions companies make about the features and prices of products (Littleson, 2007). Describe the different types of organizations that work together as channel partners and what each does.Understand how supply chains differ from marketing channels.Explain why marketing channel decisions can result in the success or failure of products.
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