Introduction
The aim of every business is to make as much profit as possible, by selling their goods and services to the consumers in the most efficient ways (Friedman, 2007). At times, it is not possible for the producers to sell their goods and services to the consumers, thereby requiring an intermediary that will make it possible for the producer to reach the consumers. These intermediaries are called marketing channels, and they help in the transfer of the ownership of goods, from their point of production to their point of consumption. In other words, marketing channels make it possible for the goods to move from the producers to the final users who are the consumers (Rosenbloom, 2012). Marketing channels are equally important to the producers and the consumers, and this discussion will focus on why companies use them and their functions they perform to both the producers and the consumers.
Importance of marketing channels to the companies
Marketing channels increase the chances of consumers to get a service or product, which is the chief objective of every company. Companies produce goods and services, not to keep them in the company but to reach the people they are intended to; the consumers. When consumers get the access of the goods and services through the marketing channels, their demand increase because consumers already know about them, and they need them more and more. The more the demand, the more the production and the more the sales, meaning that the company registers a higher profit, thanks to the marketing channels that introduced the goods and services to the consumers. In most cases, retailers as well as the wholesalers are the best marketing channels that the company may have (Shani & Chalasani, 2013).
Also, the marketing channels increase the visibility of the product or service to the final user. At times, companies produce products and services, but if customers who are intended to use them have not seen them, they cannot buy. Customers buy what they see and not what they think exist. Therefore, marketing channels make products and services visible in the market, for consumers to see. Besides, marketing channels show the effective processes of the company such as service layout and enables the company to realize the needs as well as the demand of the consumers, so as to produce exactly according to the customer’s perception, to increase sales and profit. Most importantly, marketing channels give an impact of the company image in the market, creating awareness of the existence of various companies and their products and services (Kumar, 2010).
Functions of the marketing channels
Marketing channels provide essential information to the producing companies, for instance, middlemen give the basic information about the market to the manufacturers. There are crucial information that the company must know, so as to produce goods and services that meet the needs of the consumers, such as media habits, demographic and psychographic changes, any entrance of a new competitor, as well as new preference of goods and services by the consumers so as to produce within their expectancy. Therefore, the available marketing channels such as retailers and wholesalers are always closer to the consumers, and can examine such changes are forward it to the companies so as to continue enjoying a huge market share that meets the needs of the consumers (Mathieu, 2001).
Marketing channels match buyers and sellers. In marketing, it is worth noting that buyers have their needs, which are significantly different from those of the sellers, and the company must satisfy all of them. Therefore, channel members need to know what both the sellers and the buyers need, in order to satisfy them efficiently. In most cases, sellers have no slight idea of where they can reach buyers of what they sell, and neither do the buyers know where they can meet potential sellers of what they need, thereby arising the need of a marketing channel to connect buyers and sellers. By doing so, sellers connect to their buyers and this increases sales which automatically increases the profit which is the motive of every seller (Kalafatis, 2002).
Marketing channels also have another crucial function of standardizing transactions. Many customers across the world need products that meet their needs, may it be quantity, price, location of the product as well as the favorite method of payment. Marketing channels ensure that consumers will not need to go to their sellers and negotiate for those factors, because they do it ensuring that when the product or service has reached the market, it is standardized according to the perception of the consumers. This makes it easy for the consumers to get what they need efficiently, meaning that when marketing channels standardizes transactions, they automate the most crucial stages that play a part in the flow of goods and services from their point of production to their point of transaction (Solberg, 2000).
Marketing channels is also associated with the pricing and promotion functions in the market. Producers produce goods and services, but they cannot give an estimate of how much customers will be willing to pay for them. Therefore, the pricing strategy becomes difficult for them, and that is why they use middlemen available in the marketing channels to predict how much consumers will pay comfortably for a certain good or service, because there is a close interaction bet5ween them. The price that the middlemen set is the most affordable price to the consumers, and this increases the sales and profit. Again, many consumers buy goods and service according to the level of knowledge they know about them. On this note, middlemen involved in the marketing channels design sales incentives programs according to their own perception driven by the needs of the consumers, and this builds customer traffic making it easy to locate what is in the market (Belch & Belch, 2003).
Most of the products and services presented to the final consumers require ownership and title, which middlemen through the marketing channels provide. Middlemen sell goods and services in their own names, reducing the risks between manufacturers and middlemen. Again, having the ownership to the products and services helps the middlemen to have a physical possession with what they sell, and this motivates them to find the best markets as well as meeting with potential customers, thereby benefiting themselves, consumers as well as the company.
Conclusion
In conclusion, companies do not prefer to use marketing channels to get their products and services to the final user, but given that the marketing channels have the contacts, scale of operation as well as the experience, they help companies sell more than they could if they opted to do the selling by themselves. Besides, given that the market demand keeps changing, the available marketing channels as well as the intermediaries can realize it easier than the company, and then inform the companies to adjust accordingly to meet the needs of the consumers. Besides, the functions of marketing channels can be concluded to be the following;
Promotion
Pricing
Matching demand and supply
Matching buyers and sellers
Transaction standardization
References
Belch, G. E., & Belch, M. A. (2003). Advertising and promotion: An integrated marketing communications perspective. The McGraw− Hill.
Friedman, M. (2007). The social responsibility of business is to increase its profits. In Corporate ethics and corporate governance (pp. 173-178). springer berlin heidelberg.
Kalafatis, S. P. (2002). Buyer–seller relationships along channels of distribution. Industrial Marketing Management, 31(3), 215-228.
Kumar, V. (2010). Customer relationship management. John Wiley & Sons, Ltd.
Mathieu, V. (2001). Service strategies within the manufacturing sector: benefits, costs and partnership. International Journal of Service Industry Management, 12(5), 451-475.
Rosenbloom, B. (2012). Marketing channels. Cengage Learning.
Shani, D., & Chalasani, S. (2013). Exploiting niches using relationship marketing. Journal of Services Marketing.
Solberg, C. A. (2000). Standardization or adaptation of the international marketing mix: the role of the local subsidiary/representative. Journal of International Marketing, 8(1), 78-98.
