Marketing channels

What are the marketing channels? 

cat10A marketing channel also called distribution channel is all the interdependent organizations that are involved in the process making products and services available for consumers. A marketing channel is also the term used for business-to-business market, the services and products are so made available for business users in this case.

A company can decide how many intermediaries it wants between the producer that actually produces the product and the final consumer that actually buys the product. Channel members usually bring more value for customers; that’s the reason why companies often use channel members. Indeed, channel members are experts in their field, and usually companies cannot deal with the process between producer and consumers. For example using Target as a retailer is a good asset because it’s a very famous store and lots of people are shopping there. But if a company doesn’t want to use intermediaries, this company should take care of everything from producer to final consumer which is a lot of work.

We can find two types of conventional marketing channels: the indirect one and the direct one. As expected, the indirect one doesn’t use any intermediaries whereas the indirect one is using one or more intermediaries. Those are the diagrams:

Marketing channels

Moreover, in today’s market, more and more companies are using the multichannel distribution system. One single company can sell online, in store thanks to retailers and/or wholesalers, and both business and consumer markets:

Mutlichannel distribution system

In the practicum my team was assigned to, we had to deal with this concept. We decided to take an unusual example: In-N-Out Burgers. Indeed, after looking for information about this restaurant we found out that their marketing channel was not as simple as it seems. In-N-Out chose a vertical marketing system which means that producer, retailer, and wholesalers are acting as a unified system. This is the unconventional marketing system. You can find the link to our practicum presentation dealing with more concepts and our company case on In-N-Out.

Chpt12 Practicum

Image’s reference: http://partners.visitrenotahoe.com/innoutburger

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