Functions of Marketing Channels:
There are following major distribution or marketing channel functions as given below
1. Information Provider:
Middlemen have a role in providing information about the market to the manufacturer. Developments like changes in customer demography, psychography, media habits and the entry of a new brand and changes in customer preferences are some of the information that all manufacturers want. Since these middlemen are present in the market place and close to the customer they can provide this information at on additional cost.
2. Matching Buyers and Sellers:
The most crucial activity of the marketing channel members is to match the needs of buyers and sellers. Normally, most sellers do not know where they can reach potential sellers. From this perpective, the role of the marketing channel to match the buyers' and sellers' needs becomes very vital. For example, a painter of modern art may not know where he can reach his potential customers, but an art dealer would surely know.
3. Time and Place Utility:
Channels of distribution help the consumers to buy goods at the time and place they need them. They create time and place utilities to the buyer. Thereby reducing the spatial discrepancy in the buying space.
4. Assortment of Products:
This activity leads to the customer convenience because channels of distribution help the consumers to buy goods in convenient units, lots,packs and assorted varieties of the products. in order to use the economies of scale and to minimise the overall production cost, goods and services are product in bulk. But these goods and services consumed in smaller quantity so there is essentially the need of breaking the bulk. This job is carried out by channel intermediaries.
5. Price Stability:
Maintaining Price stability in the market is another function a middlemen performs. Man\a time the middlemen absorb an increase in the price of the products and continue to charge the customer the same old price. This is because of the intramiddlemen competition. The middleman also maintains price stability by keeping his overheads low.
6. Promotion:
Promoting the products in his territory is another function that middleman perform. Many of them design their own sales incentive programmes, aimed at building customers traffic at the other outlets. Channels of distribution perform promotional activities like advertising, Personal selling and sales promotion etc. so as to assist the producer in achieving greater market share in sales and market coverage of the product.
7. Financing:
Middlemen finance manufacturers operation by providing the necessary working capital in the form of advance payments for goods and services. The Payment is in advance even though the manufacturer may extend credit, because it has to be made even before the products are bought, consumed and paid for by the ultimate consumer.
8. Title:
Most middlemen take the title to the goods, services and trade in their own name. This also enables middlemen to be in physical possession of the goods, which in turn enables them to meet customer demand at very moment it arises.
9. Help in Production Function:
The producer can concentrate on the production function leaving the marketing problem to middlemen who specialise in the profession. Their services can best utilised for selling the product.The finance, required for Organising marketing can profitably be used in production where the rate of return would be greater.
10. Matching Demand and Supply:
The chief function of intermediaries is to assemble the goods from many producers in such a manner that a customer can affect purchases with ease! The goal of marketing is the matching of segments of supply and demand.
11. Pricing:
In pricing a product, the producer should invite the suggestions from the middlemen who are very close to the ultimate users and know what they can pay for the product.Pricing may be different for different markets or products depending upon the channel of distribution.
12. Standardising Transactions:
Standardising transactions is another function of marketing channels. Taking the example of the milk delivery system, the distribution is standardised throughout the marketing channel so that consumers do not need to negotiate with the sellers an any aspect, whether it is price,quantity, method of payment or location of the product. By standardising transactions, marketing channels automate most of the stages in the flow of products from the manufacturer to the customers.
13. Provide Salesmanship:
Marketing channels also provide salesmanship. In particular, they help in intriducting and establishing new products in the market. In many cases, buyers go by the recommendations of the dealers. The dealers establish the products in the market through their persuasive selling and person to-person communication. They also provide pre-sale and after sale service to the buyers.
14. Assist in Merchandising:
Merchandising is another important function performed by marketing channels. Through merchandising, they help reinforce the awareness about the product among customers. When a customer visits a retail shop, his attention can be allured by an attractive display of the product/brand increasing his awareness and interest.Merchandising especially display, complements the selling efforts of the company and acts as a silent salesman at the retail outlet.
15. Provide Market Intelligence:
Channels provide market intelligence and feedback to the principal. In the nature of things, channels are in a good position to perform this task, since they are in constant and direct contact with the customers. They feel the pulse pf the market all the time.
There are following major distribution or marketing channel functions as given below
1. Information Provider:
Middlemen have a role in providing information about the market to the manufacturer. Developments like changes in customer demography, psychography, media habits and the entry of a new brand and changes in customer preferences are some of the information that all manufacturers want. Since these middlemen are present in the market place and close to the customer they can provide this information at on additional cost.
2. Matching Buyers and Sellers:
The most crucial activity of the marketing channel members is to match the needs of buyers and sellers. Normally, most sellers do not know where they can reach potential sellers. From this perpective, the role of the marketing channel to match the buyers' and sellers' needs becomes very vital. For example, a painter of modern art may not know where he can reach his potential customers, but an art dealer would surely know.
3. Time and Place Utility:
Channels of distribution help the consumers to buy goods at the time and place they need them. They create time and place utilities to the buyer. Thereby reducing the spatial discrepancy in the buying space.
4. Assortment of Products:
This activity leads to the customer convenience because channels of distribution help the consumers to buy goods in convenient units, lots,packs and assorted varieties of the products. in order to use the economies of scale and to minimise the overall production cost, goods and services are product in bulk. But these goods and services consumed in smaller quantity so there is essentially the need of breaking the bulk. This job is carried out by channel intermediaries.
5. Price Stability:
Maintaining Price stability in the market is another function a middlemen performs. Man\a time the middlemen absorb an increase in the price of the products and continue to charge the customer the same old price. This is because of the intramiddlemen competition. The middleman also maintains price stability by keeping his overheads low.
6. Promotion:
Promoting the products in his territory is another function that middleman perform. Many of them design their own sales incentive programmes, aimed at building customers traffic at the other outlets. Channels of distribution perform promotional activities like advertising, Personal selling and sales promotion etc. so as to assist the producer in achieving greater market share in sales and market coverage of the product.
7. Financing:
Middlemen finance manufacturers operation by providing the necessary working capital in the form of advance payments for goods and services. The Payment is in advance even though the manufacturer may extend credit, because it has to be made even before the products are bought, consumed and paid for by the ultimate consumer.
8. Title:
Most middlemen take the title to the goods, services and trade in their own name. This also enables middlemen to be in physical possession of the goods, which in turn enables them to meet customer demand at very moment it arises.
9. Help in Production Function:
The producer can concentrate on the production function leaving the marketing problem to middlemen who specialise in the profession. Their services can best utilised for selling the product.The finance, required for Organising marketing can profitably be used in production where the rate of return would be greater.
10. Matching Demand and Supply:
The chief function of intermediaries is to assemble the goods from many producers in such a manner that a customer can affect purchases with ease! The goal of marketing is the matching of segments of supply and demand.
11. Pricing:
In pricing a product, the producer should invite the suggestions from the middlemen who are very close to the ultimate users and know what they can pay for the product.Pricing may be different for different markets or products depending upon the channel of distribution.
12. Standardising Transactions:
Standardising transactions is another function of marketing channels. Taking the example of the milk delivery system, the distribution is standardised throughout the marketing channel so that consumers do not need to negotiate with the sellers an any aspect, whether it is price,quantity, method of payment or location of the product. By standardising transactions, marketing channels automate most of the stages in the flow of products from the manufacturer to the customers.
13. Provide Salesmanship:
Marketing channels also provide salesmanship. In particular, they help in intriducting and establishing new products in the market. In many cases, buyers go by the recommendations of the dealers. The dealers establish the products in the market through their persuasive selling and person to-person communication. They also provide pre-sale and after sale service to the buyers.
14. Assist in Merchandising:
Merchandising is another important function performed by marketing channels. Through merchandising, they help reinforce the awareness about the product among customers. When a customer visits a retail shop, his attention can be allured by an attractive display of the product/brand increasing his awareness and interest.Merchandising especially display, complements the selling efforts of the company and acts as a silent salesman at the retail outlet.
15. Provide Market Intelligence:
Channels provide market intelligence and feedback to the principal. In the nature of things, channels are in a good position to perform this task, since they are in constant and direct contact with the customers. They feel the pulse pf the market all the time.
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