Marketing Management

BBA II semester
Date: 2nd July 2021

Types of Marketing Channels

1. Direct Marketing Channel

Direct selling is that medium of distribution in which there is no middle person
involved, and the manufacturer directly sells the goods or services to the
customer. It is also termed as ‘zero-level channel’.
This type of channel is popular among the services industry. Most of the
services like travel, catering, salons fall under the direct marketing channel.
For Example; In restaurants, the food is prepared as well as served to the
consumers.

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 2nd July 2021

2. Indirect Marketing Channels

In this channel of distribution, the goods produced by manufacturing units
passes through different intermediaries to reach its final consumer.
1. One-Level Channel
The single-level channel involves only one middle person, i.e. the retailer who
purchases the goods from the manufacturer and sells them to the customers.
The shopping malls and marts use this channel for acquiring products at a low
price and selling them to customers at a reasonable price. Also, the
manufacturers of some specialise products like furniture, clothing, footwear,
etc. preferably go for the one-level marketing channel.
For Example; Big Bazaar is a retail mart which buys the products directly from
the manufacturer and makes it available to the consumers.

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 2nd July 2021

2. Two-Level Channel
The wholesaler buys the goods in large quantity from the manufacturers and
supplies it to the various retailers in small amounts. The retailers to the
customers then sell these goods. This channel is preferred by the
manufacturers who want to sell their products to obtain market share. It
eliminates the expenses which the manufacturer incurs on the sales force,
warehousing of goods and other retail selling practices.
It also facilitates mass production and a high volume of sales by increasing the
scalability of the manufacturers.
For Example; Rice yield by farmers is purchased and stored in bulk quantity by
the wholesalers. The retailers then buy the rice in small portion from the
wholesaler and sell it to the customers.

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 2nd July 2021

3. Three-Level Channel
The manufacturer appoints agents or gives the goods to agencies which further
distribute the products to selective wholesalers in large quantity.
This is one of the most commonly used channels of distribution for
confectionery products.
Even the perishable goods manufactured in large quantity need to be
distributed through this medium since the manufacturers cant acquire
customers more quickly through any other channel.
For Example; Tata Tea manufactured by the company is sold to the agencies in
different regions; these agencies sell it to the wholesalers of their respective
areas. The wholesaler further sells it to the retailers from where it reaches the
customers.

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 2nd July 2021

Key Terminology
Manufacturer: The Company or industry or the production unit where the
goods are produced on a small scale or large scale for selling in the market, is
known as a manufacturer.
Customer: The person who intends to buy a product or service and is capable
of doing so is termed as a customer.
Wholesaler: The one who buys goods directly from the manufacturer in large
quantity intending to sell it to the retailer, to earn a marginal profit is called a
wholesaler.
Retailer: The person who sells goods in small quantity, directly to the
customers at the maximum retail price (MRP) is known as a retailer.
Agent: The one who distributes goods from the manufacturers to the various
wholesalers and earns commission over it is called as an agent.

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 2nd July 2021

Conclusion
A marketing channel has to be selected wisely to ensure the proper distribution
of goods or services to the customers. Selection of a wrong channel may lead to
excessive cost, perishability of products, loss, etc.

Uma Chaudhary
Assistant Professor, BEL First Grade College