Channel Management

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Description of Channel Management. Explanation.




Definition Distribution Channel. Description.

A distribution channel is comprised of an array or set of businesses which collectively perform all of the activities needed to move a product and its title from production to consumption.

Typical parties in a distribution channel are:

  • Manufacturer/Producer
  • Agents
  • Wholesalers
  • Retailers
  • Industrial Distributors
  • (Industrial Users)

Definition Physical Distribution. Description.

Physical distribution, also known as logistics, is the total of activities aimed at organizing and moving products through the channels: ordering, transporting, storing, handling and inventory control.

Channel members add value to the distribution channel by:

  • Place Utility: Ensuring that the right amount of products is available at the right place.
  • Time Utility: Ensuring that the right amount of products is available at the right time.
  • Providing various value added services, such as:
    • Marketing/Promoting/Informing
    • Financing/Risk Taking
    • Storing
    • Packaging
    • Transporting
    • Merchandising
    • Selling/Contacting/Negotiating
    • Ordering/Matching

Definition Channel Management. Description.

Channel Management is an organizational concept that involves the selection, measurement and management of distribution channel parties. Alternatively it can be described as the development of policies and procedures to gain and maintain the cooperation of various parties within a sell-side distribution channel.

There are 4 major activities in channel management:

  • Selecting the (type of) partners as well as the number of them (channel length)
  • Managing the channel partners
  • Motivating the channel partners
  • Evaluating the channel partners

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Compare also: Affiliate Marketing  |  Microfinance Channel  |  Co-Creation  |  Multi Channel Marketing 

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