Channel membership - independenc and interdependence

Conventional marketing channel
Intermediaries may include: wholesalers, merchants, agents, manufacturers, retailers

• Wholesalers: break bulk (turn large quantities of stock into smaller manageable collections) & accumulate different goods, from numerous manufacturers, in a category.
• Retailers: provide wholesalers with sales outlets, help wholesalers by purchasing small quantities on a regular basis, focus on end-user customers.

Channel relations
Information, £ and marketing communications (promotional flow) also flow through channels. MC seeks to differentiate, reinforce, inform & persuade all channel members.

• Independent org.: not restricted by finance or ownership. Free to form voluntary relationships, often on transactional & temporary basis.
• Interdependent org.: recognises need to collaborate with others to achieve goals. Seeks longer-term relationships.

Variations on conventional channels

• Vertical channel structure: 2 or more intermediaries linked non-voluntarily e.g. franchises or corporate vertical marketing systems (VMS). Corporate VMS (one member owns all channel members) used to be considered as best because able to control all policies and receive all profit but has proved inefficient due to inbuilt inflexibility.
• Value networks: loose alignment of organisations who work together on a project then disband. The value rests with the network, not one single organisation.
• Multichannel marketing: using multiple channels to reach different target audiences. e.g. Diesel sells through it's own retail stores, other retailers (Selfridges, boutiques) and online.