Compare and contrast the channels for consumer products with the channels for business and industrial products.
What will be an ideal response?
Channels are diagrammed in Exhibit 12.3 and Exhibit 12.4.
Manufacturers can route products to consumers four different ways:
| · | Direct channel: no intermediaries |
| · | Retailer channel: one intermediary--the retailer |
| · | Wholesaler channel: two intermediaries--the wholesaler and retailer |
| · | Agent/Broker channel: three intermediaries--agents or brokers, wholesalers, and retailers |
Direct marketing to consumers includes telemarketing, factory outlets, mail-order and catalog shopping, and electronic retailing. However, most consumer products are sold through retailer and wholesaler channels.
Five channel structures are common in business-to-business markets:
| · | Direct channel: no intermediaries, direct to industrial user |
| · | Direct channel: no intermediaries, direct to government buyer |
| · | Industrial Distributor channel: one intermediary--the industrial distributor |
| · | Agent/Broker channel: one intermediary--agents or brokers |
| · | Agent/Broker-Industrial Distributor channel: two intermediaries--agents or brokers and industrial distributors |
Direct selling to a final user is more common in business-to-business marketing than in consumer marketing. If intermediaries are used, agents or brokers can be used to bring producers and buyers together for negotiations. Alternatively, an industrial distributor can be used as an intermediary for standardized items of moderate or low value. Industrial distributors are channel members who buy and take title to products, usually keep inventories of their products, and sell and service these products.
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