The Marketing Channel: Product, Price, Place and Promotion

Marketing is a social process concerned with the identification of consumer needs and formulation of the best way to satisfy those needs. The concept of marketing is anchored on the marketing mix, which comprises of the 4 ‘Ps’ of marketing. The four “major ‘Ps’ include the product, price, place and promotion” (Dacko, 2008). Marketing is, therefore, viewed as a process of customer satisfaction.

An analysis of marketing from an evolutionary approach suggests the existence of barter trade and barter economy, whereby the sellers and the buyers contacted each other directly in the barter market and thus there was no need for marketing and intermediaries (Kerin, 2012).

As a result of the industrial revolution, there was considerable movement and shift towards mass production, and this led to mass consumption and mass distribution. This movement and shift also led to a gap between the producer and the final consumer due to the fact that suppliers were dominating the market, and there was the deficiency of alternatives in the market. As such, intermediation emerged. Intermediaries could provide alternatives for consumption, in terms of storage, sorting and distribution of products to the consumer.

The gap existing between the producer rose due to a number of factors. Ideally, there was the loss of direct contact between the sellers and the buyers since barter trade economy was phased out. Importantly, barter economy was phased out due to the emergence of the money economy, and money was, therefore, used as the accepted means of exchange as opposed to barter exchange (Blanchard, 2010). The industrial revolution led to the mechanization and innovation of new methods of production, resulting in mass production and mass consumption. This, therefore, made producers or suppliers dominate the market.

With this also, there was growing need for intermediaries to offer extra services such as distribution, storage and sorting of products to enhance access of quality products by the consumer. Last, the consumer needs varied between consumers; therefore, there was a growing need for devising a mechanism to be used to identify those needs and formulate the best way to satisfy the consumers’ needs. With this, the concept of marketing emerged leading to the separation or the gap between the producer and the consumer (Goldstein & Lee, 2005).

The marketing concept identifies various gaps within the marketing process (Kotler & Keller, 2012). Apart from the gap existing between the producer and the consumer, an analysis of the logistics process and the value chain leads to the identification of other gaps. Some of these gaps include the gap between the source of material and the production process, the gap between the intermediaries and the consumers, the gap between channels of distribution, the gap between the transformation process or value chain, and the gaps in the market.

The logistic process comprises of two primary processes; the inbound logistics and the outbound logistic. Inbound logistics involves all activities between the source of materials to the point of production while outbound logistics involves all activities between the final process of production to the point of selling or point of consumption for a certain product. Intermediation, therefore, is necessary within the logistics process for the provision of storage or warehousing, sorting and distribution of the end products to the end consumer, and consequently aiding in closing the gaps within outbound logistics.

For any business to succeed, it is important to market it efficiently. The overall “concept of marketing covers sales, promotion, advertising and public relations” (Dacko, 2008). Marketing enables any company to succeed amidst competition since the knowledge of marketing enables the marketing team to conduct an analysis of the competitor in order to understand the strengths and weaknesses of rivalry, and subsequently invest in the weaknesses of the competitors.

Moreover, marketing enables the marketing team to conduct market research and surveys, develop feasible marketing plans and strategies, segment the market and understand the consumer buying behavior. It is important to underscore the fact that a company may be offering the best products and services in the market, but without marketing, potential buyers may not be aware of the existence of the product/service. Marketing, therefore, creates awareness of the existence of the products.

This also increases the sales of products through increased awareness due to referrals from satisfied customers. Moreover, marketing also increases and enhances a company’s reputation through building a firm brand name and brand recognition. With marketing, the consumers will understand why products are recalled; this, therefore, maintains a company’s reputation. Marketing also enhances healthy competition since the advertisements reach both the consumers and the competitors; this also enhances the growth of the market in the long run (Goldstein & Lee, 2005).

In marketing, intermediaries are also known as middlemen. Intermediaries are the means through which products get from the manufacturer to the final user. The main role of intermediation in marketing is to facilitate or enhance the sales process. These intermediaries include the agents, distributors, wholesalers, and retailers. An agent is “an individual who is independent and acts as the primary intermediary” (Kotler & Keller, 2012).

An agent represents the manufacturers to the end-users, and they are remunerated on commissions and fees. Wholesalers, on the other hand, are independent of the products they sell; they own these products, and they buy in bulk after which they sell to the retailers at discounted prices. Distributors are like wholesalers only that the former specialize in one line of competing products, unlike wholesalers who stock different brands of competing products. A distributor “maintains close relationships with customers and the suppliers/manufacturers” (Goldstein & Lee, 2005). Retailers, on the other hand, purchase the products they stock from other intermediaries after which they sell them directly to the end-users.

The universal functions of marketing are anchored on the four ‘Ps’ of marketing. These are eight, “and they include transportation, selling, buying, grading, storing, financing, standardization, securing marketing information and risk taking” (Kotler & Keller, 2012). Their role is to narrow the gaps in the market. These functions “are either performed by government, specialists, and consumers, shared by the middlemen” (Kotler & Keller, 2012). The primary objective of sorting is to group and grade products appropriately. As regards the sorting process, this involves grouping of products in terms of quality and grade. It also incorporates an assortment of products that are put together and sold to consumers in smaller units (Dacko, 2008).

Breaking-bulk, on the other hand, defines the process of dividing large quantities of products into smaller quantities in order to customize the products to suit the consumption patterns of individuals. It happens down the marketing channel (Kerin, 2012).

As regards, contractual efficiency, this is a concept of marketing that happens in the channels of distribution, where intermediaries optimize the exchange relationships with an aim of completing a transaction within the marketing channels (Goldstein & Lee, 2005).

In a conclusion, the marketing channel can be summarized into 4 ‘Ps’ which include product, price, place and promotion. To this end, as highlighted above, it serves to satisfy the customers fully.

References

Blanchard, D. (2010). Supply Chain Management Best Practices. New York: John Wiley & Sons. Web.

Dacko, S. G. (2008). The advanced dictionary of marketing. Boston, MA: MC-Graw Hill/Irwin. Web.

Goldstein, D., & Lee, Y. (2005). “The rise of right-time marketing”. The Journal of Database Marketing & Customer Strategy Management, 12 (3), 15-17. Web.

Kerin, R. A. (2012). Marketing: The Core. New York, NY: Penguin. Web.

Kotler, P., & Keller, L. K. (2012). Marketing Management (14th Ed.). Thousand Oaks, CA: Sage Publications. Web.