Fundamentals of Business

Channel management

√ The channel decision is very important. In theory at least, there is a form of trade off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order.
practice, if the producer is large enough, the use of intermediaries (particularly at the agent and wholesaler level) can sometimes cost more than going direct.
The small company has no alternative but to use intermediaries, often several layers of them, but large companies do have the choice.

√ Channel membership
Intensive distribution
Where the majority of resellers stock the `product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident.
Selective distribution
This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product.
Exclusive distribution
Only specially selected resellers (typically only one per geographical area) are allowed to sell the 'product'

√ Marketing
Management process through which goods and services move from concept to the customer. As a philosophy, it is based on thinking about the business in terms of customer needs and their satisfaction. As a practice, it consists in coordination of four elements called 4P's: (1) identification, selection, and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy.

Two major factors of marketing are the recruitment of new customers (acquisition and the retention and expansion of relationships with existing customers (base ma management).

Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect the business from competitive encroachments.

For a marketing plan to be successful, the mix of the four "Ps" must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for it. Marketers hope that this process will give them a sustainable competitive advantage. Marketing management is the practical application of this process. The offer is also an important addition to the 4P's theory.