Literature Review

1.       What is a Marketing channel?

Distribution is an essential element in the product offering of the industrial marketer, reflecting the importance of availability and reliability of supply as purchasing objectives for the industrial buyer. Distribution has two related but distinct meanings in industrial marketing. First, distribution includes resellers who buy and sell the product as it moves along the channel of distribution. Second, distribution includes physical distribution, the movement and storage of products as they proceed from the manufacturer to the end user. The first aspect is often called the marketing channel; the latter is known as logistics.(Webster, Fredrick E., Industrial marketing strategy, 1991, s219)

“ A distribution system… is a key external resource. Normally it takes years to build, and it is not easily changed. It ranks in importance with key internal resources such as manufacturing, research, engineering, and field sales personnel and facilities. It represents a significant corporate commitment to large numbers of independent companies whose business is distribution—and to the particular markets they serve. It represents, as well, a commitment to a set of policies and practices that constitute the basic fabric on which is woven extensive set of longterm relationships.” (Hayes, Jernster and Aaby, 1996, s.420)  

Distribution channels are primarily set up to perform a set of essential economic functions in society, bridging the gap between production and consumption. (Stern and Torger, 1980) In addition, as has been noted by several channel analysts (e.g., Alderson, Palamountain), distribution channels are not only economic systems but also social systems. (Stern and Torger, 1980) However, a more precise delineation of the concept is offered by Coughlan, et al (2001, marketing channels), who define a marketing channel as a set of interdependent organizations involved in the process of making a product or service available for use or consumption. In other words, marketing channels is that interdependent companies come together to deliver products and services from their point of origin to the point of consumption....................................