gdal_merge not working in GDAL 201 windows install

Question

I realise this looks like a duplicate of https://stackoverflow.com/questions/31174320/gdal-merge-py-not-working-after-gdal-and-it-python-bindings-have-been-installed, but I think the problem is a bit different.

I have installed GDAL201 MSVC 2013 win64, Python 3.4.4 and the corresponding GDAL-Python bindings on a windows 7 64 machine. GDAL and Python both seem to be correctly installed. I have also set a system variable to the correct python location and I was able import GDAL and ogr into python.

However, when I run the command gdal_merge from the GDAL prompt I get the error: 'gdal_merge' is not recognzed as an internal or external command, operable program or batch file. Gdal_merge.py gives me a "gdal_merge.py is not a valid Win32 application." popup box and an "access denied" error at the GDAL prompt. Other functions such as gdalwarp seem to work fine since when I type gdalwarp at the prompt I get a usage message.

EDIT: This is the original command from the script I was trying to use:

gdal_merge.py -o ..\merged.tif -of GTiff -init 255 -co "TILED=YES" -co COMPRESS=JPEG -co PHOTOMETRIC=YCBCR -co "BLOCKXSIZE=512" -co "BLOCKYSIZE=512" --optfile tiff_list.txt

Answer 1

I managed to fix it. Basically, by adding the path to the python file in the script:

python "c:\program files\GDAL\gdal_merge.py" -o ..\merged.tif -of GTiff -init 255 -co "TILED=YES" -co COMPRESS=JPEG -co PHOTOMETRIC=YCBCR -co "BLOCKXSIZE=512" -co "BLOCKYSIZE=512" --optfile tiff_list.txt

It is not a good solution, but is works.
I am sure that setting the system variable should have solved this, but apparently GDAL has not picked it up.