Using Marketing Channels to Create Value for Customers

Sometimes when you buy a good or service, it passes straight from the producer to you. But suppose every time you purchased something, you had to contact its maker? For some offerings, such as a haircut, this would work. But what about the products you purchase at the grocery store? You couldn’t begin to contact and buy from all the makers of those products. It would be an incredibly inefficient way to do business.

Fortunately, companies partner with one another, alleviating you of this burden. So, for example, instead of Procter & Gamble selling individual toothbrushes to consumers, it sells many of them to a drugstore close to you, which then sells them to you and other people.

The specific avenue a seller uses to make a finished good or service available to you for purchase—for example, whether you are able to buy it directly from the seller, at a store, online, from a salesperson, and so on—is referred to as the product’s marketing channel (or distribution channel). All of the people and organizations that buy, resell, and promote the product “downstream” as it makes its way to you are part of the marketing channel. This chapter focuses on downstream channels. In the next chapter, we look not only “downstream” but also “upstream” at the people and organizations that supply the materials and services and that allow products to be made in the first place.