Marketing Involves interchanging of goods possession from production place to consumer place. The travel of the product from source to destiny is termed as a marketing channel. Marketing channels are also named as distribution channels. They are essential to improve the efficiency and allows the organization to plan the marketing strategies.
Change of product-state from producer to end-user is the main objective of marketing channels. Marketing channels are categorised into four different levels. The four level channels differentiate by having a middleman in between the producer and the end-user.
The levels of marketing channels:
Zero level channel in the marketing defines the product interchanging without a middleman. A customer can buy the product directly from the producer. Farmers are more beneficial persons with this producer-consumer process. Manufacturer-owned stores are one of the medium to engage with the customers and provide all the services.
Zero-level channel improves the revenue and customer satisfaction. Producer to consumer level provides customer needs and also maintain the delivery time. The digital scenario has changed the traditional practices and enhanced the communication and connection between the producer and the end-user. This makes producer deal directly with the customer to provide goods and services.
One-level channel consists of a middleman in between the producer and the consumer. This channel is beneficial for the textile industries. Manufacturers are the luckiest persons in this channel. Retailers are the effective sources to improve the business network and these retail services are expertized to deal with the consumers.
Distributing goods through various sources will be an advantage for the producers to outspread in the vast market. The process will reflect the strong and weak areas to attain profits and make the company react based on the outcomes. These intermediates have a prominent role to create the demand and supply.
The Two-level channel involves wholesale dealers and retailers between producers and consumers. In Two- level channel consumers are allowed to buy the goods in bulk and consumer will experience the low prices compared to the retailers. Cost of the merchandise will increase from each dealer and industries prefer to supply high consignments.
A distributor is the key to interchange the goods from manufacturer to wholesalers and retailers. They look for the clients and maintain activeness in promoting business. A distributor is subjected to perform operations like; maintain the database of the customer, publish the goods, integrate with an organization to deliver goods and keep track of inventory.
Three-level channel contains a middleman called “agent “ in between the producer and the consumer. Agents deal with manufacturers to publish the product in the market. Agents take the help of wholesale deals to reach the customers. They can choose the retailers in the market and can deal directly with the consumers.
The appropriate utilisation of Three-level channel will improve the revenue for all the dealers involved in this process. It improves the product publicity and make things easy for the dealers to engage with consumers.