Marketing Channels

Marketing Channels

Definition

• Distribution channels are sets of interdependent organizations participating in the process of making a product or service available for use or consumption. [cite: 2]
• The intermediaries who resell merchandise are called merchants (e.g., wholesaler, retailer).
• Agents act as brokers and negotiate on the producer's behalf but do not take title to the goods.

Functions of Distribution Channels

• Gather information about potential and current customers, and competitors.
• Develop and disseminate persuasive communication to stimulate purchasing.
• Negotiate and reach agreements on price to transfer ownership.
• Place orders with manufacturers.
• Assume risks in carrying out channel work.
• Provide buyers with financing and facilitate payment.
• Oversee actual transfer of ownership of goods.