Learn about different types of marketing channels, including the retail sector, etc., and how these are used to sell goods and services.
The Different Types of Marketing Channels
Also known as the channel of distribution, a marketing channel refers to how products are moved from manufacturer/producer to the consumer. They include a range of activities which facilitates the movement of goods. Such activities include email marketing, social media marketing, video marketing, content marketing, as well as affiliate marketing. These marketing types are an important avenue of commercialization.
1. Manufacturer to customer types of marketing channels
This is the most direct marketing amongst various types of distribution channel. It is when manufacturers sell their goods or services directly to consumers, without any intermediary, wholesaler, retailer, or other intermediary. This is prevalent in industries where products are of a very short shelf-life and are unlikely to survive a lengthy distribution process. This is true for smaller-scale industries, where a consumers demand for goods can be met from a single location with limited staff.
2. Retailer to Consumer
A conventional mainstream sales channel, it is when retailers buy products direct from manufacturers or via a wholesaler. They then sell these to consumers, typically with significant lag. This is perfect for manufacturers who make clothing, furniture, shoes, dishware, and other retail goods. This is the place where consumers typically want to spend a little extra time with those items before making their purchase decisions.
The channel may also work well for the manufacturer that is new in the market and wants to get established fast. They may be able to leverage a well-established retailer to bring their products to end users by direct selling. Sales may however come from affiliates, e-mail marketing, or Internet, among other methods.
3. Wholesaler to consumer
Another channel of marketing is when a wholesaler purchases products from the producer/agent, then sells to consumers. In this channel, a consumer is able to purchase products in bulk, usually for lower prices than usual, as there are no extra costs such as services fees one pays if buying from retailers. It is important to note that wholesalers do not always sell direct to consumers. In some cases, they might pass through a retail store before delivering goods to consumers. So, such may be considered indirect channels. The retailers are intermediaries.
4. Main Marketing Channels Components
There are four basic components to be implemented in order to get great results for your company. These are necessary marketing strategies to reach potential customers.
Product: The first component is the product. A retail business usually begin their operations in a particular category of products, like jewelry for women. The retail business needs to define factors like the price range, the design, and selection of jewelry pieces. If a retailer is able to guess these factors correctly, he or she can appeal to the targeted customers.
Location: The location in which a retail product is going to be sold is also a crucial component in retail marketing. The sales location needs to be in an area that is most likely accessed by your target customers. The location should be highly visible, and it should be easily accessible and accessible.
Price: Price is an extremely important component in retail markets, because it decides if the prospect customer is going to purchase a product. If products are priced higher, the customers will decline to buy it, whereas if it is priced lower, then they will be suspicious about the quality of the product. So, it is essential that you label your products appropriately with prices.
Promotions: Just like in any other marketing technique, promotions are also a crucial component in retail marketing. A business needs to find effective ways to promote which will draw customers to their sales outlets. The amount spent on promotions should translate to extra sales in order for businesses to generate more profits.