Marketing Channels and Delivering Customer Value

1. What is the role of marketing intermediaries?

Intermediaries served different roles to the firms according to their channels of distribution. The role played by the intermediaries can be grouped into two: The intensive distribution and the exclusive distribution. The intensive distribution intermediaries help in distribution the stocks of the firms by ensuring they are available to as many outlets as possible; in order for the consumers to access them. For example, items such as toothpaste are sold in different outlets by the intermediaries in order to in order to ensure brand exposure and customer’s convenience. Companies such as Coca Cola, Kimberly-Clark and other consumer-goods companies use the intensive distribution intermediaries to distribute their goods (Donnelly, 2010).

Exclusive distribution intermediaries, on the other hand, help the producers to distribute their product to different intermediaries. In this category of intermediaries, producers provide right to distribute their goods only to limited number of dealers. Exclusive intermediaries are involved in distributing luxury goods, for example, Bentey automobile dealers sell their products by giving the rights to sell to limited number of dealers. Through this way, Bentey benefits from selling support by the intermediaries and in control of the prices, promotions and other services. Exclusive intermediaries also improve the company’s brand image (Donnelly, 2010).

2. Explain why value delivery network is a more relevant expression to use than the terms supply chain and demand chain.

Value delivery network is more relevant than supply chain and supply demand since it focuses on reducing potential distribution costs and increasing customers’ satisfaction. Unlike the demand chain and supply chain that focuses only on outbound distribution, value delivery network also addresses other issues such as inbound distribution and reverse distribution. In other words, value delivery network involves the whole chain supply management, controlling the value added flows between the suppliers, the resellers, the company and the final users. The value delivery network is more effective method of chain supply management since if focus on best possible ways of reducing the distribution costs by ensuring teamwork across based on close relationships across the functional areas. The value delivery network focuses on the relationship within the company and across various organizations that are within the chain supply. Using the value added network, companies can create logistic harmony across the functional logistic team by use of integrated supply manager positions, senior-level logistic executives and outsourcing their logistic functions to the third-party logistics providers. These parties assist by increasing, effective access to global markets and the reduced cost of distribution of goods (Donnelly, 2010).

3. How do channel members add value to a marketing system?

Channel members involved in the distribution and marketing of the goods of companies are important in the physical flow of the goods, payment flow, ownership flow, information flow and promotion flow. For example, Ford designs cars that meet the consumers’ needs. Nevertheless, Ford relies on other marketing channels to persuade customers to buy Ford’s cars, to provide good sales, to uphold the brand reputation and to service the cars after sale (Donnelly, 2010).

4. What are the eight key functions that members of the marketing channelperform?

The eight key functions of marketing channel include:

1. Providing information to customers about the product
2. Ensuring price stability of the product in the market
3. Promotion of the product
4. The marketing channels also help in production functions of the products through unified contract systems, for example, Samsung vertical marketing systems
5. Upholding the reputation of the company’s brand by resolving the conflicts between the company and the middlemen.
6. Controlling the demand and the supply of the product by setting the prices
7. Standardization of transaction by controlling the distribution costs
8. Matching the needs of the buyers and the sellers, for example, the Coca Cola manufacturer-retailer franchise system that acts as an advisor between the needs of interests of the company and the consumers (Donnelly, 2010).

References

Donnelly, R. (2010). CIM coursebook: Delivering customer value through marketing.

Burlington: Routledge