Channel Members and Value Added
The
marketing channel is defined by Kotler and Armstrong as “A set of
interdependent organizations that help make a product or service available for
use or consumption by the consumer or business user” (p. 341).
During
the marketing plan analysis of Super-Blue, I realized that a success of a
product depends in big part of the relationships with customers, but also with
important suppliers and distributors along the supply chain. For example, to manufacture Super-Blue, the
company will require the raw material to be on time, good quality, and
according to environmental standards the product will offer once in the market,
and in the hands of final consumers. In order to achieve these important
requirements, the company has to build excellent relationships with suppliers.
Another important partner to the company will be the
businesses that will take care of Super-Blue once the product is made. In the
case of Super-Blue, the downstream marketing channel’s partner will be businesses
such as Dollar Tree, 99 Cents only Store, Dollar General,
and many other discount stores that will deliver the product to customers. The
marketing team believes that the discount stores will add value to the product,
and capture the expected value from customers. The distributors mentioned
before have the experience, knowledge, contacts, and many more good
characteristics that the company LA’s Totally Awesome is not able to achieve on
it own.
The following illustration explains how distributors reduce the number of channel transaction, and make the buying process a lot easier for customers.
The following illustration explains how distributors reduce the number of channel transaction, and make the buying process a lot easier for customers.
Copyright ©2014 by Pearson Education, Inc. All rights reserved
According
to Kotler and Armstrong, “In making products and services available to consumers, channel
members add value by bridging the major time, place, and possession gaps that
separate goods and services from those who use them. Members of the marketing
channel perform many key functions” (p. 342)
Channels perform the following functions:
Information: Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange.
Promotion: Developing and spreading persuasive communications about an offer.
Contact: Finding and communicating with prospective buyers.
Matching: Shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging.
Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.
Physical distribution: Transporting and storing goods.
Financing: Acquiring and using funds to cover the costs of the channel work.
Risk taking: Assuming the risks of carrying out the channel work”
Channels perform the following functions:
Information: Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange.
Promotion: Developing and spreading persuasive communications about an offer.
Contact: Finding and communicating with prospective buyers.
Matching: Shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging.
Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.
Physical distribution: Transporting and storing goods.
Financing: Acquiring and using funds to cover the costs of the channel work.
Risk taking: Assuming the risks of carrying out the channel work”
To
leaned more about Super-Blue’s marketing analysis presentation, please see the file below