Q: What is a marketing channel, and how important is it?
A: A marketing channel is how companies get products into the hands of consumers and the channel is absolutely critical to sales. No channel. No revenue.
But, before delving into the marketing channel, let’s back up a little and consider the enormous impacts on businesses from the full supply chain – not only moving the finished products to market, but also getting raw materials/semi-finished goods to manufacturers. If these materials don’t make it to companies on time, then there is no way to effectively keep the manufacturing operation at full-force or keep the marketing channel functioning.
Consider also that an effective supply chain is a global issue. An estimated 90 percent of global retail products move around the world in containers through oceans, seas, and canals. One of the most important of these is the Suez Canal – a 120-mile long channel in Egypt, running between the Mediterranean and Red Seas, linking shipping transportation between Africa and Asia. The Suez Canal provides a direct route between the seas and reduces the trip from the Arabian Sea to London by 5,500 miles (8 days). Eight days is a lot of time in today’s global economy, plus fuel costs for ships average $25,000/day! In 2020, more than 18,500 ships traveled the canal.
This March, a container ship named ‘Ever Given’ blocked the Suez Canal after it was knocked sideways by a strong southerly wind. The ship, at more than one-quarter-mile long and a weight of 224,000-tons, held 20,000 containers worth $9 billion, and was stalled for nearly a week in the canal, holding up billions of dollars of international commerce! More than 400 ships were backed up to use the canal, with dozens of other vessels deciding to forego the canal and take the long way around the Horn of Africa. For those in line at the canal, it could take weeks to get all the ships clear and return to normal operations.
And, the work done to free the ship is a story unto itself. For six days tugboats and dredgers cleared away 30,000-cubic meters of sand and mud from around the ship’s bow and stern. Whew.
Supply chains are critical in marketing!
Group Activities and Discussion Questions:
- Discuss the importance of the supply chain and logistics in marketing.
- Show video of the Suez Canal blockage: https://youtu.be/8BSdmIhB9wc (Note: Make sure to look for more recent videos as the story gets updated.)
- What is the impact of the Suez Canal blockage on trade?
- Have students research how raw materials, semi-finished goods, and finished products move to market.
- What commodities and materials are shipped via container and the sea?
Source: Associated Press; CNN; New York Times; Wall Street Journal; other news sources