Analysis of Lewis (1968) Seven Theoretical. Foundations of Marketing Channels

 

McInnes theory of market Separation (1964) proposes that marketing should bridge the gap between producers and consumers. These gaps can be product/service, assortments, information, time and place. The potential for market transactions are created when producers become separated from consumers by division of labour. With division of labour comes specialization and as specialization increases, division of labour becomes more extensive increasing separation between producers and consumers. With the widening gap separating sellers and buyers comes the need to for increased participation of middlemen. The market separation perspective proposes four types of separation between producers and consumers. Spartial separation, which is the geographical distances between consumers and producers; temporal, the time difference between consumers and producers leads to temporal separation, information, which is the lack of awareness about products and services; and financial separation, which is the inability of consumers to purchase products due to financial status. Marketing seeks to bridge these gaps by ensuring that consumers know about a product when they should and it will get to them when needed.

Vaile et-al’s theory of marketing flow on the distribution channel posits that in the process of distribution, there definitely will be obstacles and therefore a need to use close channel circuits to minimize and eventually close up the distance. Flows overcome separation. These gaps maybe information/communication, distributor gaps, seller to buyer due to non- payment, buyer to seller, negotiator, finance, risk, physical distribution, etc. According to the institutional school, marketing middlemen (exchange specialists) stand between original producers and final consumers in the marketing channel to ensure that the flow continues. The key concept of Vaile et al.'s 'Marketing Flows Theory' is the idea of directing the use of resources and allocating scarce supplies in accordance with existing demand, as well as aiding in making consumption dynamic in line with changes in our ability to cater to human wants.

Aspinwall’s Parallel System’s theory determines the rate at which goods flow through marketing /distribution channels. According to him, the rate at which goods are marketed and promoted should parallel the rate at which they are reserved and stored in depots or retail outlets so that the supply and demand gaps are properly closed and a proper integration of demand and supply. Adopting the institutional system approach, parallel goods should match parallel channels and hence parallel markets

According to Aspinall’s Depot theory goods are moved towards consumption at the rate established by the final consumer. This rate is informed by his need for product replacement, which is inversely related to gross margin, services required, search time and consumption time. Understanding the rate of replacement enables wholesalers and retailers determine the rate of flow and hence the need for storage. This ensures proper management of inventory at macro and micro level (that is for the industry, companies, manufacturers, wholesalers, retailers, households and individuals).

Bucklin’s Postponement and speculation theory- Bucklin posits that for there to be equilibrium in market flow, it is necessary to postpone changes and modification of products as well as stock inventory to the latest possible point in the marketing flow, so as to reduce cost and risk, while on the other hand, introducing changes in form and withholding inventory at the earliest possible time as well, based on marketing speculation, to enable advantages that comes with economies of scale. In all, while postponement leads to mass customization, speculation leads to mass production dues to economies of scale.

Alderson’s 1965 theory of transaction and transvection, describes the marketing process where products move as purchases and sales from the original seller through intermediary purchases and sales to the final buyer of the finished product.

Alderson’s theory of sorting (1957)- Transvection links all institutions in the channel ensuring that goods are sorted (sorted-out, accumulated, allocated), and transformed (modified, merchandised, stored, transported or used), leading to a logically coherent whole before they get to final buyer.