Marketing channels & supply chain Management MBA (Masters Level) Essay

Marketing channels & supply chain Management MBA (Masters Level) - Essay Example The channel functions, concentration and dispersion, are related to the homogeneity and heterogeneity of supply, and the appropriate sorting process must be provided. Successive channel stages should be attempted to overcome any discrepancy between product assortment and market requirements (Christopher, 2005). Customer requirements of one or two units are at variance with supplier requirements of mass production. From a micro point of view, a firm's distribution decisions are designed to combine, supplement, or modify those of other firms, in order to form channels of distribution that the most effective. Since markets are dynamic, the opportunity for new combinations is continuously available. Channels are thus used by companies to overcome barriers. These barriers include the separation of time and space between producers and markets, the costs of moving goods, the communications barriers between producers and users of products, and the separation of demand (Christopher, 2005). From a macro point of view, channels change slowly. New distribution outlets tend to complement, rather than replace, existing ones. Supermarket chains, for example, do not eliminate the independent merchants; discount houses do not eliminate department stores; and integrated manufacturers do not eliminate wholesalers (Stroh, 2006). Rather, they enrich the alternative channels available, are modified in turn, and settled into a niche in the distribution structure. Since markets represent diverse wants and needs, the channels necessary to serve them will continue to be diverse. Customers and products are separated in time, space, and ownership. The conduct of human activities presupposes the availability of an appropriate assortment of goods and services. Channels of distribution bridge the separations and support our life style. In a broad sense, channels are composed of middlemen and facilitating agencies, wholesalers, retailers, financial institutions, and transportation agencies (Kotler and Armstrong 2008). Channels allow companies to add value to their products (Stroh, 2006). For instance, channels allow such companies as Ford and Toyota, McDonald's and Wendy restaurants to change their pricing decisions and promotion campaigns (Kotler and Armstrong 2008). A product can have various combinations of packages, brands, labels, tastes, and appearances; it can come in various shapes, colors, sizes, and materials, and be offered with numerous services and privileges. Channels help these companies promote products through various channels, to be sold at varying prices, discounts, and markups. These decisions integrate physical handling, transportation storing, sorting, and distribution of goods in a systematic and effective manner. The overall function of distribution channels is the concentration and dispersion of products in relation to market needs (Kotler and Armstrong 2008). Distribution channels concern the kinds and number of middlemen required to get products and services to the market. The challenge to management is to construct systematic links amongst institutions in order to achieve a coherent pipeline capable of moving goods and their title to markets. 2. Basically, the choice is one of direct or indirect distribution. In the latter case,