Impact of Direct/Online Selling on Traditional Channels Essay

3290 Words Jul 25th, 2006 14 Pages
ABSTRACT
Today, we are living in the age of information technology. Internet has brought revolution in every sphere of life. It has changed the way of our thinking, working and living. Last decade of 20th century witnessed major market players leaping to cash the dividends of this breakthrough. All major companies of the world are now utilizing the internet as an alternative channel for promotion and selling of their products. This paper critically analyzes the impacts of this transformation on the traditional channels and customers thereby focusing on future of the world markets. The research is backed by critical analysis on various aspects related to marketing channels around the world. At the end there are some useful guidelines for
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Whatever the case, this channel necessitates the customers to physically visit the retailer, select the product in stock, purchase it and carry it along (most cases). Critical analysis of the channel reveals the following:-
1) This channel provides an opportunity to the manufacturer to focus on the job of manufacturing. This advantage is however offset due to proliferation of specialization in every field of management that allows employees to concentrate on their specifically tailored jobs.
2) The channel has an inherent disadvantage of existing communication gap between the customer and the manufacturer. The manufacturer is generally too late to know what the customer wants. The undesired stock remained for long with retailers. This limits the employment of wide-scaled customization processes. Few special customers may still enjoy certain privileges but in general the concept of mass customization is impracticable via traditional channel.
3) The cost incurred on distribution and retailers is eventually borne by the customer.
4) Prices checks to cope with competition are often traveled to manufacturer who has to compensate by either comprising on the quality or is forced to lay-off.
5) The customer has to choose from the available stock which puts a limit on his/her choice. More-so, the customer has no other immediate source to compare the different products while standing in one retailer shop.
6) This channel however offers

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