Channel Management

Abstract

Channel management is a critical and integral part of the marketing management department of the company. The channel partners help the company to move their goods from the manufacturing site to the doorstep of the consumers. This is a complicated process in all areas and countries – particularly in geographically and culturally diverse countries like India. There are a wide variety of intermediaries already existing in the markets and they serve different roles and purposes. The organization has to understand the objectives of each of these types of intermediaries and then plan and design their distribution systems accordingly. There is a cost attached to each layer of the marketing channel, and the companies have to find out the ways and means of getting the maximum benefits from these intermediaries at the optimum cost. The type of marketing channel adopted by the company is dependent on the product-market structure of the company. The distribution systems of FMCG companies are different from those of consumer durables, which are again different from those of industrial products. From time to time, there are conflicts between intermediaries and even between the company and its intermediaries. The key responsibility of resolving the conflicts is with the company, and in many cases, they have laid down policies and practices of resolving conflicts. These conflicts are happening more often as the power balance in the marketplaces are steadily shifting from the manufacturer to the retailers and, in general, to the channels. However, retailers and wholesalers provide invaluable service to the company as well as the consumers and have thus become an important part of the channels and the distribution system as a whole.