8.3 Channels of distribution
We might know the needs and wants of our customers, and we might have exactly the right product to meet those needs and wants. However, to satisfy our customers, we have to close the gap between the product, here, and our customers, over there. We close that gap with a distribution system using marketing channels which bring our product to the customer.
The channels of distribution are sometimes called marketing channels . The terms refer to systems of interdependent organisations that facilitate the movement of the physical product or service from the producer to the consumer; and they include the producer, consumer and all the intermediaries involved in distribution. Marketing channels incorporate all of those things that are involved in the exchange process that is central to marketing.
Marketing channels can be direct or indirect and/or have centralised or decentralised exchanges. A centralised exchange system has a high time and place utility because in such an economy you can purchase many products from the one location, such as from a supermarket, in a small amount of time.
What we do not readily see in a centralised exchange system are the many functions and activities undertaken prior to the product reaching the store from which we buy it. The list on page 550 of your textbook summarises those main functions for you.
Market channels can take the form of intermediaries who may take title to the goods, or agents who do not take title but still act as a go-between, assisting the producer in getting the product to the consumer. Such intermediaries often adopt many of the marketing functions of the producer. On the other hand, intermediaries often act simply as facilitators, providing a service (like transportation and finance) but are not otherwise involved in the marketing of the goods and services.
A port, of course, could be not only an intermediary, but can itself be a product, offering stevedoring and warehousing services, among others.
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