Channels Of Marketing

Individual consumers and corporate/organizational buyers are aware that thousands of goods and services are available through a very large number of diverse channel outlets. What they may not be well aware of isthe fact that the channel structure, or the set of institutions, agencies, and establishmentsthrough which the product must move to get to them, can be amazingly complex.

Usually, combinations of institutions specializing in manufacturing, wholesaling, retailing, and many other areas joinforces in marketing channel arrangements to make possible the delivery of goods to industrial users or customers and to final consumers. The same is true for the marketing of services. For example, in the case of health care delivery, hospitals, ambulance services, physicians,laboratories, insurance companies, and drugstorescombine efforts in an organized channel arrangement to ensurethe delivery of a critical service. All these institutions depend on each other to catereffectively to consumer demands.

Therefore, marketing channels can be viewed as sets of interdependent organizations involved in the process of making a product or service available for use or consumption.From the outset, it should be recognized that not only marketing channels satisfy demandby supplying goods and services at the right place, quantity, quality, and price, but they also stimulate demand through the promotional activities of the units (e. g., retailers, manufacturers’ representatives, sales offices, and wholesalers) comprisingthem. Therefore, the channel should be viewed as an orchestrated network that creates value for the user or consumer through the generation of form, possession, time, and place utilities.

A major focus of marketing channel management is on delivery. It is only through distribution that public and private goods can be made available for consumption. Producers of such goods (including manufacturers of industrial and consumer goods, legislatorsframing laws, educational administrators conceiving new means for achieving quality education, and insurance companies developing unique health insurance coverage) are individually capable of generating only form or structural utility for their «products». They can organize their production capabilities in such a way that the products they have developedcan, in fact, be seen, analyzed, debated, and by a select few perhaps, digested.But the actual large-scale delivery of the products to the consuming public demands different types of efforts which create time, place, and possession utilities. In other words, consumers cannot obtain a finished product unless the product is transported to where they can gain access to it, stored until they are ready for it, and digested, exchanged for money or other goods or services so that they can gain possession of it. In fact, the four types of utility (form, time, place, and possession) are inseparable: there can be no «complete» product without incorporating all four into any given object, idea, or service.