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What is Marketing Channel?

Chapter-1: Marketing Channels:
Structure and Functions
Lecture-1

Course: Marketing Channels

(MKT 450)
Faculty: Abdullah Al Faruq (AFq)
North South University (NSU)

Role of Marketing Channels

- Links producers to buyers.
- Performs sales, advertising and promotion.
- Influences the firm's pricing strategy.
- Affecting product strategy through branding.

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.
Henceforth, a marketing channel is a set of
interdependent organizations involved in the process of
making a product or service available for use or
consumption.

Why are there Marketing Channels

and why do they Change?
Demand Side Factors
a. Facilitation of Search
- Marketing channels undoubtedly facilitate searching i.e.
consumers do not have to roam around from door to door or from

- Willingness to stock and customizes profits.

place to place without having a single idea where to go to buy a

- Financing channel partners.

particular product/brand and who to look.

- Acts as the linchpin between marketer and consumer.

- So a channel can be regarded as a compass guiding the

consumers who are willing to purchase and consume a product to
the source from where they can make the purchase.

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Why are there Marketing Channels

and why do they Change? (Cont.)
Demand Side Factors (Cont.)

Why are there Marketing Channels and why

do they Change? (Cont.)
Supply-Side Factors
a. Routinization of Transactions

b. Adjustment of Assortment Discrepancy

- A marketing channel ensures that every time each member interacts

- A marketing channel member buys in huge quantity/bulk same

in order to make the purchase it is undertaken in a systematic manner

yp of goods
g
and breaks them and sort them out in such a
type

i.e. free of bargaining, negotiation etc.

manner that the final consumers can buy in small quantity or any

- Therefore, channel ensures minimum practice of standardization in

quantity they feel like and most importantly buy different variety

the transfer of goods from marketer to consumers.

of the product types instead of same.

b. Reduction in Number of Contacts

- A channel member does the valuable job of sorting.

- Without channel partners/members every producer/marketer have

- Some of the activities involved in sorting are: sorting out;

to interact with every single potential and actual buyer increasing the

accumulation; allocation; assorting.

exchange process thereby, cost, time and decreasing efficiency.

What is the work of the marketing channel?

- The work of the channel includes the performance of several
marketing flows.
- The term flows rather than function is because the work flow
through channel being done at different points in time by different
channel member.
- There are basically eight universal channel flows that needs to
be undertaken by the channel partners/members.
- Some flows move forward through the channel, some flows
move backward and there are some that moves in both direction.
Figure: Marketing Flows in Channels

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Who Belongs to a Marketing Channel?

Manufacturers/Marketer
- Manufacturer or the marketer who produces the product/service
or any other entity who commercially markets a product or service
for the final consumers.

Intermediaries
- The term intermediary refers to any channel member other
than the manufacturer or end-user.
- The intermediary includes wholesalers and retailers.

End User
- The end-user or consumer also is a vital member of a marketing
channel as well.