Marketing Channels Essay

2665 words - 11 pages

A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process. A marketing channel is a useful tool for management.
An alternative term is distribution channel or 'route-to-market'. It is a 'path' or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them flow in the opposite direction (from consumer to the vendor). A marketing channel can be as short as being direct from ...view middle of the document...

Direct selling can be conducted one-on-one, in a group or party format, or online.

Benefits of Direct Selling Benefits for the Consumers:
• Opportunity to try and test the products;
• Tailored made demonstration and consultation in a friendly environment;
• Personalised delivery at home;
• Right to withdraw the purchase within a given period (additional protection);
• Direct contact with the seller;
• Guarantee and after sales service;
• Flexible buying hours.

Benefits for the Direct sellers:
• Possibility to establish and to run own business at minimum cost/low risk;
• Convenient flexible earning opportunities;
• Flexibility to choose working hours;
• Spouses or family members can be partners in business (family business);
• Adjustable opportunities ranging from part-time to full-time activity;
• No formal qualifications required;
• Adequate training and support from companies;
• Large range of products available;
• Social contact and personal recognition.

Benefits for the Companies:
• The most effective method to enter new market with relatively low cost, especially providing unique products or services;
• Does not require high capital investment;
• Allows to avoid additional intermediaries in distribution, saved money can be invested elsewhere;
• Effective in gaining the initial interest and attention of prospective customer – personal touch;
• Particularly effective in the marketing of low-cost consumer goods or products insufficiently known: new products, technically complex products.

Limitations of Direct marketing channel

Direct selling is relatively expensive compared to other forms of marketing. Each direct sales call can cost over $300 in some industries, according to "Know This" online, a reputable business reference site. Companies that sell directly must hire sales reps. Hence, the sales reps' salaries and benefits must be factored into the costs of all sales appointments. Sales reps must also be trained in classrooms and on the job before they can even call on customers. These training programs often last several weeks, which can get expensive. Sales reps also incur expenses traveling by air or car as not all customers are local.

Time Consuming
Sales calls can be time consuming. A sales rep may spend an hour or more introducing the features and benefits of her products. During this process, she may need to ask questions, overcome objections and try to close the sale. Moreover, reps may take several visits or calls to actually make sales. Some consumer or business clients need to think about their purchasing decisions. Also, the decision maker or owner may not even be available at the time of the sales call. Sales reps can only make one sale at a time. Contrarily, an online marketer may receive several sales in the same time period.
Limited Coverage
Small companies have limited coverage when they sell to clients directly. In other words, they can only cover...

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