Marketing channel

For the chain of intermediaries, see distribution channel.

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.^[1]

Roles of marketing channel in marketing strategies:

• Links producers to buyers.
• Performs sales, advertising and promotion.
• Influences the firm's pricing strategy.
• Affecting product strategy through branding, policies, willingness to stock.
• Customizes profits, install, maintain, offer credit, etc.

An example of this is Apple orchard: Apple orchard >Transport > Processing factory > Packaging > > Final product to be sold > Apple pie eaten

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 the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent) intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer.

References

1. ^ American Marketing Association