Marketing Management, Millenium Edition - epiheirimatikotita.gr

What Work is Performed by Marketing Channels? 237Figure 5-1How a Distributor Effects Economy of Effortvices from those who need or want them. Members of the marketing channel performa number of key functions:➤➤➤➤➤➤➤➤They gather information about potential and current customers, competitors, andother actors and forces in the marketing environment.They develop and disseminate persuasive communications to stimulate purchasing.They reach agreement on price and other terms so that transfer of ownership orpossession can be effected.They place orders with manufacturers.They acquire the funds to finance inventories at different levels in the marketingchannel.They assume risks connected with carrying out channel work.They provide for the successive storage and movement of physical products.They provide for buyers’ payment of their bills through banks and other financialinstitutions.➤ They oversee actual transfer of ownership from one organization or person toanother.Some functions (physical, title, promotion) constitute a forward flow of activityfrom the company to the customer; other functions (ordering and payment) constitutea backward flow from customers to the company. Still others (information, negotiation,finance, and risk taking) occur in both directions. Five flows are illustrated inFigure 5-2 for the marketing of forklift trucks. If these flows were superimposed in onediagram, the tremendous complexity of even simple marketing channels would beapparent.The question is not whether these channel functions need to be performed—theymust be—but rather who is to perform them. All channel functions have three thingsin common: They use up scarce resources; they can often be performed betterthrough specialization; and they can be shifted among channel members. If a manu-