Getting the product to the market is another link in the marketing mix. Producers or manufactures uses intermediaries to bring their product to the market by developing a marketing channel. Marketing channel are set of independent organizations participating in the process of making a product or service available for use or consumption (Kotler & Keller, 2014). Channel intermediaries are firms or wholesalers and retailers who assist in moving the product from the producer to the consumer. The channel that a company uses directly affect other marketing decision. For example, place decision affects pricing. Marketers who distributes through mass merchandisers like Wal-Mart will have different pricing objective and strategies that those that sell in specialty store.
Distribution channel provide a number of logistics or physical distribution functions that increase the efficiency of the flow of goods form producer to customer. Producers have used channel member to add value to its product and service. The purpose of the distribution channel is to; create efficiency by reducing the number of transactions necessary for goods to flow from many different manufacturers to customers. Adjusting for discrepancies in the market assortment of goods and services via sorting. Standardizing exchange transactions by setting expectations for product. Facilitating searches by both buyers and sellers making the purchasing process easier for customers and manufacturers. Channel members also perform a risk taking function in that if a retailer buys a product for a manufacturer that does not sell, it is stuck with the item and will lose money.
Channel member add value to a product or services by undertaking some of the risk and increase efficiency for...
... middle of paper ...
...obile and Verizon has a large sales force, and are better able to reach more customers and to establish their brand and become market leader.
Using a distributor such as T-Mobile is effective for manufactures as they are able to cover a wider cross section of the industry, increase their profit margin and reduce cost such as advertisement and promotion. Also, as previously mentioned distributors have not only the expertise, but the knowledge and the sale force to push the product. By using distributors, manufactures can focus on production and innovation. Manufactures such as Apple and Samsung through careful and strategical use of distribution channel have established their brand globally. Distributor’s provider added value for a company, however manufactures need to be careful that they don’t have too many intermediaries as this will affect their profit margin.
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