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  • Essay / Criteria for Evaluating Channel Alternatives

    To evaluate channel alternatives using the 3 criteria, the company must first identify its main channel alternatives in terms of types of intermediaries, number marketing intermediaries and finally the responsibility of each member of the channel. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an Original Essay First of all, the types of intermediaries. A company should identify the types of channel members available to perform its channel work. There are 5 types of channel intermediaries; wholesalers, distributors, agents, retailers and Internet intermediaries. Wholesalers break down the “bulk” into smaller packages for resale by a retailer. They buy goods from producers and resell them to retailers and take ownership or title, unlike agents. Wholesalers also often reduce the costs of physical contact between producer and consumer. For example; the cost of customer service and the cost of the sales force. An example; Wholesalers buy rice in bulk from rice plantations, then break it into smaller quantities to sell to distributors. Distributors are like wholesalers who offer non-competing products or ranges. They also break down bulk products, but at the same time offer a value-added service to the product, such as bulk delivery, along with credit terms and maintained contract. For example; Distributors can then divide the bags of rice into smaller bags and then sell them to retailers like Giant, NTUC and Sheng Siong. Then the agents are mainly used in the international market. They obtain an order and earn a commission, but unlike wholesalers, they do not take title to the goods. Additionally, training agents can be very expensive because they are difficult to keep under control due to physical distances and are therefore laborious to motivate. For example, a rice plantation in Japan may search its local agents who have international contacts to try to find wholesalers or distributors in other countries. Additionally, retailers are people who have a stronger personal relationship with the consumer. Retailers will own several other brands. A customer will expect to be exposed to many products. Retailers have the right to promote and advertise the products and services on their own and also give the final sale price of the product to the consumers. For example; Retailers often have a strong “brand” themselves. For example, Wall-Mart in the United States, NTUC in Singapore. Finally, a new entity not generally found in traditional channels: Internet intermediaries. Since the Internet has a circulating geographic market, the main advantage of the Internet is that niche products reach a wider audience. The Internet can be used as a direct (using its own website) or indirect distribution channel like the niche website Amazone.com, etc. So by using internet intermediaries people can use e-commerce technology for payment etc. Next, to determine the number of channels members can use at each level. Three strategies are available: intensive distribution, exclusive distribution and selective distribution. Intensive distribution is a strategy in which they stock their products in many outlets. Therefore, according to the example I gave above. Rice producers can sell their products at many points of sale..