Question

How do channel members bring about operational efficiency in the process of transferring
goods and services from the manufacturers to the customers? (Hint: focus on the Supply Side
factors that justify their existence)

4. List and explain the differences between the two types of Channel Systems that are used in the
markets. Why is one of these systems preferred over the other? Give reasons for that.

Please help me answer this in essay form at least 2 paragraphs

Answer 1

1. Marketing channel choices today are as crucial as businesses make choices about product characteristics and prices. Consumers have become increasingly challenging. They get used to what they want. If you can't get your product when, where, and how they want it, they're just going to purchase a competing product. In other words, how businesses sell has become as crucial as what they sell. The companies with which a business partner actively promotes and sells a product as it moves to customers through its marketing channel are referred to by the business as its channel members (or associates). Companies strive not only to select the finest channels of marketing, but also the best channel partners. A strong channel partner like Walmart can promote and sell the heck out of a product that couldn't transform its producer into a profit otherwise. Walmart, in turn, wants to work with powerful channel partners that can rely on providing it with excellent products that fly off the shelves continually. By comparison, it can be a liability for a weak channel partner, like a poor wife.

Companies are partnering with intermediaries not because they necessarily want to (ideally they can sell their products directly to customers) but because intermediaries can assist them sell the products better than they can work alone. In other words, they have some kind of capacities the requirements of the producer; contact with many clients or the correct clients, marketing knowledge, shipping and processing capacities, and the capacity to grant credit to the producer are among the kinds of assistance that a company can obtain through the use of a channel partner.

2. The company itself is organizing and managing a direct distribution channel. At the start, direct channels tend to be more costly to set up and may sometimes involve substantial capital investment. It will be necessary to set up warehouses, logistics systems, trucks and distribution employees. However, the direct channel is likely to be shorter and less expensive than an indirect channel once those are in location.

A manufacturer has more control over how products are delivered by monitoring all elements of the distribution channel. They have more control over the reduction of inefficiencies, the addition of fresh services and pricing.

An indirect distribution channel, otherwise known as wholesale distribution, depends on intermediaries to conduct most or all distribution functions. The most difficult aspect of indirect channels of distribution is that the products of the manufacturer and client interaction must be entrusted to another party. The most successful logistics companies, however, are experts in providing receivables in a manner that most manufacturers can not be.

Also, indirect channels free the manufacturer from any start-up expenses. They are much easier to handle with the correct connection than direct distribution channels. Indirect channels of distribution add price layers, sellers and bureaucracy. This can boost consumers ' costs, slow down delivery and take control out of the hands of the manufacturer. On the other hand, indirect distribution could bring in new levels of expertise