What are Marketing Channels? – WAU
Marketing channels are the ways you take your product to your end customer, that is, they are the way you make your products available for purchase.
There are many factors that influence when defining your marketing strategies: performing competition analysis, knowing your customer’s profile and following the market’s mood are some of them.
But one of the most important, without a doubt, is the marketing channels.
Having a good product to offer to the market is essential, but if you don’t think about how to get that product into the hands of the right customer, in the right quantity and at the right time, the chances of the business failing are pretty big.
And that is exactly what the definition of marketing channels consists of: knowing how to make products or services available to the final consumer according to their demands and requirements.
Think only of yours content marketing plan, for example.
To have a successful plan, you must also know who your personas are and what your pains and problems are in order to produce content that addresses these issues and offers value to them, right?
But what’s the use of creating sensational content if you don’t know how to distribute it so that your persona finds you at the right time on the purchase journey?
Knowing the marketing channels you can use well and choosing which ones will best suit your business is essential for the success of any company.
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What are marketing channels?
What comes to your mind when you hear the word “channels”? Do you think about television channels or maybe a water channel?
These are two very different things, but if you think about the meaning of the word channel, you will see that in both cases, and in all others where it is used, the idea is the same.
Channel it is a means of distributing or transmitting something.
When we talk about TV channels, they are a means by which the broadcast of the station reaches the viewer, or in the case of water channels they are the means by which water is carried from one point to another.
Marketing channels follow the same concept.
They are the ways you can take your product to your end customer, that is, they are how you will make your products available for purchase.
That’s because people have less and less time to dedicate to any aspect of their lives, and although the act of buying is interesting for the vast majority, access to information and the internet made the consumer more rational about the time spent in this activity.
Thus, we can say that the main objective of the marketing channels is to make a product arrive as quickly as possible at the place where the consumer expects to find it.
But putting your product in the right place when your ideal consumer is willing to buy it will vary depending on the profile of your audience and the type of product you market.
Thinking about it, we will see below what are the types of distribution strategies, with their intermediaries, that you can use and how to choose the best for your company!
Why are marketing channels so important?
To understand it a little better, let’s think about the following example:
What do you do when you are hungry? One of the possibilities is to go to the kitchen, get a loaf of bread, a jar of curd and a glass of milk with chocolate.
Items that you can easily find in a bakery or supermarket, right?
Now, assuming you are the manufacturer of the curd, you would probably need to buy large quantities of milk and packaging weekly to produce your product, which would not be possible with a simple trip to the supermarket.
It would probably be necessary for you to send transport trucks to livestock farms and packaging manufacturers every week.
But it is possible that these suppliers or resellers of these manufacturers offer, for your convenience, the possibility of receiving orders over the internet or call and send the products directly to your factory.
The ways in which marketers move products from the point of production to the point of consumption involve marketing channels, which are essential to carry out the activities necessary to link the producer with the end user.
That is, the supermarket and the packaging and milk distributors mentioned in the example are members of a distribution channel, without which the jar of curd would never reach your table when you were hungry.
How do marketing channels work?
The main marketing channel is one where the manufacturer makes the sale directly to the consumer, without intermediaries.
For example, a farmer who produces chicken eggs can sell them directly to the consumer, without having to go through a store or supermarket.
Another example is when your company has an e-commerce, being able to sell directly to consumers through this means.
However, many manufacturers do not have enough financial resources to sell their products directly, either through physical sales or online.
Think of a candy maker, for example. It would cost this company a lot of money to set up small stores across the country to sell its candies and serve all of its customers.
That’s why, in many cases, using intermediaries is the best solution.
The intermediaries are the ones who represent, distribute and even sell what you produce to the final consumer.
Using them it is possible to achieve more effective sales results.
Below are some examples of the main intermediaries that operate in the marketing channels:
In this type of distribution channel, the purchase is made by a retailer – who may be the owner of a store, supermarket or specific trade related to what you produce – who will then make a new sale to the final customer.
This channel is mostly used by manufacturers that produce consumer goods. such as clothes, shoes, furniture, appliances, etc.
The wholesaler buys large quantities directly from the manufacturer to resell it to industrial establishments, other merchants and to retailers.
Since you buy in bulk, it manages to reduce part of the cost for its consumer.
However, in most cases this consumer must be a legal entity or a member of a club to be able to buy from the wholesaler.
For example, a pharmaceutical wholesaler who sells directly to pharmacies, who then take the products to the final consumer.
It is who sells, stores and provides technical assistance in a specific printing region.
The distributor buys your company’s products and makes a new sale to customers located in an area close to his.
As an example, drink distributors can be mentioned.
When product distribution involves more than one intermediary, it is necessary to use agents to assist with transactions between all participants in the marketing channel.
An agent will receive a commission from you, the producer, and will be very useful in cases where products need to move quickly in the market.
For example, in the case of a fisherman who catches large quantities of fish, which is perishable, daily, it is necessary that, as soon as it is available for consumption, the fish reaches the hands of the final consumer quickly, so that the product is not lost.
As making contact between different wholesalers or retailers could consume a large part of the fisherman’s time, the best way out, in this case, is to use an agent who will make all these contacts and sell the product to these intermediaries, earning a commission on the your sales.
The role of marketing channels?
Ensuring the availability of the final product to the consumer is often the most crucial issue for the success of a marketing strategy.
The management and selection of a company’s marketing channels is one of the fundamental activities of the company’s marketing manager.
It is located within one of the famous four “P’s”, the Point of Sale, along with Price, Product and Promotion.
Choose the best channel will involve building a series of mechanisms and a network, through which the company goes to the market, keeping in touch with its customers and performing a set of tasks, from the generation of demand to the physical delivery of the product.
Among the tasks performed by the marketing channel are also:
- Provision of product information;
- Service customization;
- Quality assurance;
- Partition of lots;
- Offer of complementary products, such as after-sales and logistics.
How to choose the best channel?
To determine which marketing channel to use in your business, the best way is to start by understanding which strategy is most aligned with your product.
Intensive distribution – when the manufacturer sells through as many intermediaries as possible – should be used if the product has a low unit value and a high frequency of purchase, so that it will always be found on most shelves.
If it is a product that can be compared to a similar one, selective distribution is recommended – when the manufacturer sells through a selected group of intermediaries – therefore, it will be possible to have intermediaries better prepared to defend the brand.
But in the case of a product that requires a specialized sales effort or an investment in stock and specific physical facilities, the best solution is exclusive distribution – when you choose your own resellers, giving them permission to do the exclusive distribution of the product and controlling their activities.
Exclusivity will guarantee adequate support for the product, providing it even with an image of value and luxury in the market.
But for you to make a more conscious choice, we have separated some tips that can help you subsidize your decision on which marketing channel and type of distribution will be most suitable for your company.
- Evaluate markets (both real and potential) that can be worked on;
- Determine the characteristics, behaviors and needs of your customers, as well as the quantity, geographical dispersion and frequency of purchase of your product;
- Determine the essential characteristics of the product in terms of dimensions, perishability and degrees of standardization to optimize transport;
- Define the characteristics that intermediaries must have regarding the type of transport, equipment and storage system used, information technology, among other aspects;
- Assess the environmental and local characteristics necessary for the conservation of your product, such as humidity and temperature;
- Evaluate the intermediary companies involved in your channel regarding their financial strength, the other products they offer, the levels of service quality, marketing and the strength of the brand.
One of the most important points in this list is to know and select the members of the channels, as they will be the ones who will take not only your product to the final customer, but also your brand, always seeking to achieve the highest degree of consumer satisfaction.
It is also necessary to be aware of the integration between the members of each channel, to ensure that the product reaches the hands of the consumer at the right time.
After all, at the time of hunger, he expects the jar of curd to be on the shelf, no matter how it arrived and what was the structure behind it all.
Depending on the company’s desire to control the distribution of products more or not, the number of members in a marketing channel may vary.
With shorter channels, you’ll have a lot more control, allowing you to change your actions and strategies more quickly to improve the entire flow of products on the market, and achieving faster and more pure consumer feedback.
Today there is a wide variety of channels available on the market and choosing the best way to publicize and distribute your product can be a big problem.
That’s because a wrong choice at that time can compromise your entire marketing planning.
However, the use of channels is essential for reaching the consumer in the best way and establishing partnerships with companies that can profitably benefit your business.
And you, already use a marketing channel to distribute your products? Understand how to apply them in your sales strategy with the ebook How to use Marketing to scale your sales.