IMPORTANCE OF MARKETING CHANNELS

Abstract

In 1972, the world's great economic powers—USA, USSR, Japan and EEC (nine member European Economic Community)—alone had a combined gross national product of approximately two and a half trillion dollars. Only a minute portion of these goods and services were consumed at the point of production. Furthermore, only a very small fraction was purchased by the ultimate consumers directly from the final producers, and of course, virtually none was purchased from finished product producers' suppliers. Yet, somehow, trillions of dollars worth of goods and services throughout the world manage to overcome these gaps of space (and time) and ownership, and reach the ultimate consumers. It is the marketing process which performs the several functions required to bridge the gap between production and consumption. The cost or value of this process for the four great economic powers was probably of the magnitude of 750 billion dollars. Even for a single product, these functions are seldom performed by one firm, but rather are performed by a sequence of firms. The particular sequence of firms that performs three of these marketing functions— the movement of ownership, the negotiation of title, and the physical movement of products—is usually defined as the marketing channel.

Citation

(1976), "IMPORTANCE OF MARKETING CHANNELS", European Journal of Marketing, Vol. 10 No. 2, pp. 83-84. https://doi.org/10.1108/eb060793