Marketing Environment and Distribution Channels

Marketing Environment and Distribution Channels
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Why marketing managers should understand their marketing environment?
Marketing environment of a business consists of all things which affect the manner in which the business operates. Business organizations can control some factors of the marketing environment, although some factors cannot be controlled (Solomon et al, 2013). It is important for marketing managers to have knowledge of their marketing environment in order to manage effects of negative factors and take advantage of positive factors. Marketing environment can be classified into micro environment, macro environment and internal environment. Business organizations should effectively identify all factors that constitute their marketing environment and make strategies how to manage such as factors for the benefits of their organizational activities.
Overview of distribution channels such as channel levels, direct versus indirect distribution, channel organizations, multichannel, vertical, conventional and horizontal marketing systems
Distribution channel refers to the paths that products move from manufacturers to customers or payments for such products move from customers to business people. Consumers and manufacturers are the two main market components. Keillor (2013) explains that intermediaries play a vital role of eliminating the distance between consumers and manufacturers. Channel level is the intermediary in the channels of marketing distribution between the manufacturers and consumers. There are various types of distribution channels. Each channel contributes a role in creating products available to consumers.
A direct channel (a zero level channel) refers to the direct marketing channel in which there is no intermediary; manufactures sells directly to the customers. Indirect channel refers to cases in which manufacturers use various intermediaries to sell products to consumers (Dent, 2011). A one-level channel consists of one intermediary normally a retailer between consumers and a manufacturer. A two-level channel and a three-level channel consist of two and three intermediaries in the respective order.
Channel organizations refer to the channels that businesses use to sell products to consumers depending on the appropriate channels that manufacturers use as suitable choices. There are several types of channel organizations. First, manufactures coordinate with wholesalers to purchase bulk products and sell such products in small bits to retail outlets (Dent, 2011). Secondly, manufactures can use agents to distribute products to consumers. The agents identify buyers for the manufactures and prepare product transactions. In this way, manufacturers pay commissions to agents for transactions made. Thirdly, manufacturers can create branch offices which sell products at designated places to reach customers at grassroots levels. Fourthly, manufacturers can coordinate with retailers to directly get products from the manufacturing companies to sell to consumers.
A market system refers to the network of manufacturers, distributors, consumers and other actors which come together to do transaction for products and services. Different market...