Essay about The Evolution in Marketing Channels

940 Words 4 Pages
The Evolution in Marketing Channels

The distribution channel is a means by which to overcome the time, place and possession gaps that separate the goods and services from the consumers. The Internet is changing the typical structure of distribution channels to close the gap in new ways. There is a trend toward disintermediation and hybrid marketing channels, and the Internet as a marketing channel may affect the types of intermediaries companies use.

The Trend Toward Disintermediation Technological advances and the expansion on online direct marketing are impacting the nature and design of marketing channels. With disintermediation, layers of intermediaries are eliminated from a marketing channel or new types of
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Mr. Kaynes, owner of Bron-Shoe Company feared his intermediaries would feel threatened by his Web so he watched the statistics carefully of his Web customers. He says between 2% and 3% of the people who visit his site end up ordering something; that is good by Web standards. And he says they are new customers too, not just buyers diverted from other marketing channels.
Disintermediation can present problems for companies who elinimate their intermediaries in favor of the Internet as their direct marketing channel. It can be a double whammy for both the producers and intermediaries: Producers who don't develop new indirect channels risk remaining competitive, and traditional intermediaries must find new ways to add value to the supply chain or risk being cut-out.

Hybrid - Multichannel Distribution With the proliferation of customer segments and channel possibilities, more companies have adopted multichannel distributions systems especially by adding an eCommerce piece to the marketing strategy. Hybrid channels offer advantages to companies facing large and complex markets, but they're harder to control and generate more conflict as more channels compete for customers and sales. IBM added 18 new channels in less than 2 years. As they increased their

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