The term "channel" may refer to a distribution system for businesses; or, in technical analysis, a trading range observed between support and resistance levels on a price chart.
Key Takeaways
The term "channel" may refer to a distribution system for businesses or a trading range between support and resistance on a price chart.
Distribution channels describe the method by which a product moves from producer to consumer.
A price channel is a chart pattern that graphically depicts the peaks and troughs of a security's price over a period of time.
A channel in finance and economics can either mean a:
Distribution channel, which is a system of intermediaries between the producers, suppliers, consumers, etc., for the movement of a good or service.
Price channel, which is a trading range between support and resistance levels that a security's price has oscillated within for a specific period of time.
Distribution channels describe the method by which a product moves from producer to consumer. These channels vary considerably in complexity depending on the product. Producers selling their products directly to a consumer (like a farmer selling their goods at a farmers market) is the most basic type of distribution channel.
Other channels are much more complex, with products sometimes passing from producers to brokers to wholesalers or retailers, before finally reaching the consumer.Each step of the distribution channel increases the cost of getting the product to the consumer. This is sometimes referred to as "margin stacking". Reducing the steps of a distribution channel is a common way for businesses to reduce expenses.
Not all channels move directly toward consumers. Some, such as a business-to-business marketing channel, involve transactions between two companies. For example, a technology company may manufacture an internal item, such as a computer chip, and sell that product to other manufacturers that use it to assemble hardware components. Sometimes, businesses may decide that bringing a process in-house and producing it themselves, may be more economical and reduce the cost of goods or services sold and, hence, increase profits. This is an example of vertical integration.
Price Channels
A price channel is a chart pattern that graphically depicts the peaks and troughs of a security's price over a period of time. If there is an observable symmetry in the oscillation, then it is considered to be a valid price channel that can be used as a tool for stock analysis. Market technicians suggest that at least four points of contact are required (two each for the upper and lower lines). Price channels can move either upwards, downwards, or stay flat, but the two lines must be approximately parallel.
If a stock is fluctuating between consistent highs and lows, a trader can use a channel to predict price peaks and troughs. For example, a trader could buy a stock when the price touches the lower channel line and set a profit target at the upper channel line.
Using channels is best suited for moderately volatile stocks that experience regular oscillations. Traders consider an upward breakout froma channel as bullish, and a downward breakout as bearish. Temporary price spikes above and below a price channel are common, therefore, other indicators should be used to confirm a breakout. Channels lose their relevance as a predictive indicator when prices break out from the pattern.
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A channel is a passageway, a means of access for a thing, a communication, or an idea. Think of a channel as sort of a tunnel or a funnel that moves something directly through. The noun channel can be used for many such avenues.
There are three types of distribution channels: direct, indirect and hybrid. Direct. With the direct channel, the company sells directly to the customer. For example, a brewery that brews its own beer and sells it to customers at its own brick-and-mortar location employs a direct channel of distribution.
Channels are how you will reach and interact with your customers—your buyer, user, and target impact (BUTI) segments—and are a critical part of your business model. There are five core stages of activity that are carried out through your channels.
There are three primary channel types. A formal communication channel transmits organizational information, such as goals or policies and procedures, informal communication channels are where information is received in a relaxed setting, and the unofficial communication channel, also known as the grapevine.
Traditional communication channels are face-to-face conversations and phone calls. With technology, channels also include email, text messaging, instant messaging, and social media.
There are three basic types of channels, straight, meandering and braided. Describing a channel by one of the aforementioned terms does not mean that the entire channel is straight or otherwise. It simply means that some portion of the channel can be described in such a way.
As we explained, the shortest marketing channel consists of just two parties—a producer and a consumer. A channel such as this is called a direct channel. By contrast, a channel that includes one or more intermediaries—say, a wholesaler, distributor, or broker or agent—is an indirect channel.
A direct channel is a sales channel through which goods and services are sold by the manufacturer directly to an end user. These traditional channels don't involve partners of any sort.
a marketing channel in which there are two levels of intermediaries (for example, a wholesaler and a retailer) between the manufacturer and the end-user. See Marketing Channels.
Retail is the most common distribution channel for consumer brands, using third-party outlets to bring products to market. Supermarkets, big-box stores, convenience stores and department stores all act as intermediaries and the point of contact for customers.
Retailers like Walmart and Target, buy the product from the manufacturer and sell them directly to the consumer. This channel works best for manufacturers that produce shopping goods like clothes, shoes, furniture, tableware, and toys.
A good channel strategy should have the following elements: A clearly defined target market (including preferences and demographics)Identified channels to reach that audience. Defined ad spend budget, per channel.
Short distribution channel - The number of intermediaries is reduced. Normally, there is only one intermediary between the manufacturer or producer and the final consumer. Long distribution channel - A distribution channel is considered long when it is made up of at least four levels.
A channel strategy refers to a vendor's plan to move a product or service through a chain of commerce to the end customer. Channels serve two primary functions. The first is to sell a product or service to a customer, and the second is to deliver a customer experience.
A communication channel refers either to a physical transmission medium such as a wire, or to a logical connection over a multiplexed medium such as a radio channel in telecommunications and computer networking.
A communication channel is the medium through which you send a message to another person. There are written, verbal, and nonverbal channels of communication. An electronic channel is another means to communicate verbally, nonverbally, or in writing. You can use multiple channels of communication at the same time.
In a larger nautical context, as a geographical place name, the term channel is another word for strait, which is defined as a relatively narrow body of water that connects two larger bodies of water. In this nautical context, the terms strait, channel, sound, and passage are synonymous and usually interchangeable.
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