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MARKETING MANAGEMENT - Structure and Design of Marketing Channels

Marketing channel structure and its levels - Structure and Design of Marketing Channels

   Posted On :  19.06.2018 12:13 am

Channel structure is distinguished on the basis of the number of intermediaries.

Channel Structure

Channel structure is distinguished on the basis of the number of intermediaries. There are different levels in a channel structure. The common levels are zero-level, one-level, two-level, three-level. Each level presents both opportunities and challenges for the marketer. Exhibit 4.6 gives a picture of the different levels



Zero-level

 
structure is one of the simplest forms of the channel structure. Here organizations like Avon, Eureka Forbes use direct selling mode to take the products from their production houses to the consumers directly. A lot of money has to be spent in order to make this channel structure effective, as there is no third party to take your product to the consumer. Even a bakery can come as a firm, which bakes cakes and sells it directly to the consumers. Marketers who use the mailing services, toll-free numbers are also using this service.
 

One-level

 
structure is one in which we have one intermediary acting as a link between the manufacturer and the consumer. Here the retailers procure goods directly from the manufacturer and supply it to the consumers. Retailers like Viveks, Wal-Mart deal directly with the manufacturer. In some cases in order to retain profitable and reputed retailers the manufacturers act as wholesalers. One of the advantages for the intermediaries is the customization and the discounts they receive.
 

Two-level

 
 
channel has two people interceding before the product reaches the consumer. Here there would be a wholesaler and a retailer who takes the efforts for a speedy delivery and this is one of the most commonly used structures for consumer goods. In the case of Metro, most of the small retail and Kirana stores buy all the merchandise from Metro and in urn sell them to the consumer. One of the advantages of the four-level structure is the benefit of using the wholesaler in the distribution of services.
 

Three-level

 
channel happens predominantly when the firms plans to go global. When a manufacturer enters another country, it always holds good when he uses the help of agents to operate in that environment. The agents are people who know the legal procedures and who can negotiate with the host country in case of a problem. Most of the airline firms that operate in different countries take the help of agents to penetrate the market  

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