Principles of marketing/PMKT103/Product branding distribution channels/Marketing Channels

A direct marketing channel consists of just two parties: the producer and the consumer. By contrast an indirect channel includes one or more intermediaries (wholesalers, distributors, brokers, or agents).

Firms often utilize multiple channels to diversify their customer base, reach more customers and increase their effectiveness.

Some companies find ways to increase their sales by forming strategic channel alliances with one another - particularly in international markets (where they may not possess a high level of local knowledge).

Other firms look for ways to cut costs, and strengthen direct communication with customers, by cutting out the 'middleman'. Direct foreign investment, joint ventures, exporting, franchising, and licensing are some of the channels by which firms attempt to enter foreign markets.