Marketing Channels Assignment
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Added on 2020-11-02
Marketing Channels Assignment
Added on 2020-11-02
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Media plan: a.Different types of marketing channels: A marketing channel is a way in which goods and services are created to meet the needsof the consumer. All goods go through distribution channels, and a company's marketingwill depend on how their goods are delivered. The roadmap with which the product goesfrom the production siteto the consumer is essential because now the marketer will haveto decide which path or channel is best for his particular work (Chron,2019).Marketing channels are an effective way to ensure that their products reach thecustomers they want. Marketing channels are often integrated to provide increased profitsfor the business. For a business, to fulfil the initial goal, they must know these marketingchannels. Any business should consider maximizing its marketing funnel to ensure thatcustomers receive their products. According to Statista, using marketing channels can helpincrease engagement early.They are so important that without them, the customer might not receive the product at all.The marketing channels are equally beneficial for manufacturers. Manufacturers rely onthem to ensure that their products are sold effectively.Most products require the use of marketing channels to distribute effectively to consumers,so a marketing channel has many advantages. Firstly, it helps the company save moremoney. When a business uses distribution channels, they end up spending less than if theydid the task themselves. If they handle each of the steps necessary to get the product intothe hands of their target customers on their own, it could cost them a lot of money.Members of the marketing funnel know what to do and what measures to take to reducecosts.Saving time is the second benefit of it. Marketing channels can also help businessessave more time. They don't need to spend time figuring out how to distribute theirproducts. The spare time they spend can be used to increase the company's productivity.When they decide to sell directly to consumers, they may incur additional costs. Expensesinclude renting a warehouse, hiring labour and shipment. All of these can cost them morethan they use a marketing channel. They will not be able to focus solely on production. Thismeans they have to turn their attention to other parts of the business. Distribution channels
help them focus on producing what their customers need. The third advantage isconvenience. Using distribution channels is more convenient for customers. Customers donot have to go to different companies to buy other products. The distribution channelsensure that customers receive a variety of products from the same retailer. Therefore, theycan purchase various products from different manufacturers without wasting time andtravel fees. Fourthly, cost reduction. Because intermediaries become accustomed to settlingtransactions, they become cheaper over time. Businesses do not have to worry aboutbargaining with their customers. The middleman has linkages with customers and helps withtransactions. Fifthly, attracting more customers. As a manufacturer, their goal is to ensurethat customers buy their products. They may spend additional costs, trying to increase thenumber of customers who buy their product. However, when they use intermediaries, it canbe a way to reach out to more customers. They help manufacturers sell more. Middlemanalso helps customers find products. Customers can find products when they shop at a retailstore. This is better than going to the manufacturer. Manufacturers can also focus onproducing the goods that the customer needs. They place their products in many differentretail stores so that customers can access more. Distribution channels, therefore, providethe link - possibly indirectly - between producer and consumer. Deliver products quickly isthe sixth advantage of marketing channel. Distribution channels may be responsible fordelays in customer receipt of products. However, sometimes they can also become quick.Customers don't want to wait long before receiving products. This is very important foronline businesses. Suppose businesses want to ensure that when customers order fromthem, they can deliver the product as soon as possible. If they can't do this, it will causecustomers to consider shopping from other local retailers. Using distribution channelsreduces product delivery time. Seventhly, increase inefficiency. Each level of a marketingfunnel has its specialization. It helps increase supply chain accuracy. The producer does nothave to worry about how the goods will be delivered to the customer. All efforts can thenbe directed towards the manufacture of useful products for the customer. Distributors haveskills to receive, manage and distribute products. Retailers are experts in delivering productsto customers. By using direct distribution, businesses' costs can be significantly higher thanif they were using marketing channels. Finally, access to customers. Since retailers provide alink between the customer and the manufacturer, they can provide insight into what the
customer needs. This critical information can be used to create trending products. Knowingthe latest trends provides a more accurate description of the goods to be produced.However, all of these benefits are only possible when businesses use supply chainmanagement. Let's also check out some of the disadvantages they may experience. Thedistribution channels also have some potential adverse effects. These disadvantages canlead to reduced sales and losses. First of all, reduced revenue. Once businesses usedistribution channels, they will sell their products at a lower price. This is a lower price thanthe price that retailers sell to customers. For retailers to make a profit, they must sell at ahigher price. They cannot deliver products of businesses without any benefits. If businessessold directly to customers, they would get a more significant profit margin - as simple asthat. Distributing products to customers leads to complete control of profits. Other damagesbusinesses may face due to direct retail payments or shipment payments. All these costs canlead to losses.Secondly, not directly affiliated with customers. When a retailer receives aproduct from the company, they can make some changes to try to increase sales. This is badfor the business. Customers may not recognize their products from time to time. Businesseswill then lose the link between the customer and the company. Customers will no longerturn to their brands. Instead, they can buy from competitors. Furthermore, they areresponsible for what products they produce. However, retailers have more control over themessage delivered to customers. The worst that can happen is if a retailer lied about thebenefits of the product. Once customers realize that, they will underestimate a business'product.Thirdly, loss of product value. The problem with using distribution channels is thatbusinesses cannot control the product. This means that hp5 may have no control over theimage a customer has of their brand. Sometimes there may be a delay in shipping. Becauseof this, their product may lose value before it reaches the customer. If this continues, it willlead to losses.Complexity is the fourth disadvantage of marketing channels. Somedistribution channels require a certain number of participants. In such cases, businesses canbe confusing. Adding more members to a marketing funnel creates distribution delays. Thiswill also decrease customer reviews of your product.Fifthly, too many people involved. Ifthey have too many middlemen in a marketing funnel, it can increase costs. Paying allintermediaries will cost them a lot. This additional revenue can be used to expand yourbusinesses. If businesses don't pay their middlemen directly, they can raise prices as a way
to make a profit. This affects customers, as they pay very high fees for the products ofbusinesses.Confusion is the final drawback of it. Channel members can sometimes haveconflicts of interest. It happens whenever roles and responsibilities overlap. Once a disputearises, it can lead to a significant loss that could affect the business.Conflicts usually arisewhen there are several distributors. Management becomes an issue. Problems with supplychain management cause conflicts. These conflicts, if not resolved, can lead to severe losses.There are four types of marketing channels, including direct selling, selling throughintermediaries, dual distribution and reverse channels. One channel can be retail stores,websites or mail-order categories as well as direct personal contact information by mail,email or text message. Here is a bit more details on each.Direct selling - manufacturers sell directly to customers or online storesmainly use this:Direct selling is the marketing and sale of products directly to consumers who are far awayfrom a fixed retail location. This method of selling can eliminate the need for middlemen -wholesalers, retailers direct sales participants are independent contractors, they define howmuch time and energy they want to invest in, and directly set up a time to sell marketingand promotion plans, or define how to build a sales team, and service their store. They areindependent sales reps and their bosses. Direct selling is also a way to own a business withminimal investment. Peddling is the oldest form of direct selling.Direct Selling differs from Direct Marketing because when selling direct, individual salesstaff sell their products by dealing directly with customers. Direct marketing is a businessorganization looking for a relationship with their customers without going throughconsulting or reseller. Direct selling often uses multi-level marketing (salespeople are paidto sell and recoup sales, in addition to selling directly to customers, they can also hire otheremployees by themselves to be their official distributor and enjoy commissions sold bythemselves and their distributors) rather than single-level marketing (salespeople benefitonly on the products they sell)Modern direct selling includes sales made through party plans, live demonstrations,personal contact arrangements, as well as internet sales.
A textbook definition is: "The direct personal presentation, demonstration, and sale ofproducts and services to consumers, usually in their homes or at their jobs."Industry representative, World Federation of Direct Selling Associations (WFDSA), reportedthat its 59 regional member associations accounted for more than the US 114 billion USD inretail sales in 2007, through its of more than 62 million independent sales representatives.The American Direct Selling Association (DSA) reports that in 2000, 55% of adult Americanshad ever purchased goods or services from a direct selling agent, and 20% said that theywere present (6 %) or ever bought (14%) a natural selling agent.According to WFDSA, consumers benefit fromdirect selling because of the convenienceand services it offers, they are provided with complete product information, homedelivery, and guaranteed satisfaction. In contrast to franchising, the cost for an individual tostart an independent direct selling business is usually very low and less, or there are noinventory requirements or other commitments to get started.Most direct selling associations, including the Bundesverband Direktvertrieb Deutschland,the German direct selling association, WFDSA and DSA, require their members to adhere tocodes of conduct towards fair partnerships. Both to customers and salespeople. Mostnational direct selling associations are represented in the World Federation of DirectSelling Associations (WFDSA).Selling Through Intermediaries - make products available to customersthrough wholesalers and retailers: A marketing channel is where intermediaries such as wholesalers and retailers are used todelivering a product to a customer, which is called an indirect channel.The most indirectchannel marketers can use (Manufacturers -> agents -> wholesalers -> retailers ->consumers) is used when there are multiple manufacturers Small and multiple smallretailers or an agent are used to helping large coordinate supply of the product.Dual distribution - more than one marketing channel is used to get aproduct to consumers:
Dual distribution describes many types of marketing arrangements that manufacturers orwholesalers use simultaneously to reach end-users. They can sell directly to end-users aswell as sell to other companies for resale. Using two or more channels to appeal to thesame target market can sometimes lead to channel conflicts. An example of a dualdistribution is a franchise in the form of a business in which franchisors license theoperation of some of its units for the franchisee to simultaneously own and operate severalentities.Reverse Channels - it is the opposite of the others; it flows from theconsumer to an intermediary and then to the beneficiary: In terms of flow, it does not have any in common with the previous three channels. Eachflow from the producer to the intermediary (if any) to the consumer.Technology has created a different flow, however. It goes in the opposite direction and cango - from consumer to middleman to the beneficiary. Think of making money resellingproductsorrecycling.There is another difference between the islands and the more traditional channels - thereferral of the beneficiary. Otherwise, no manufacturer found. As a result, only users orbeneficiaries found.b.Evaluate how marketing channels of communication integrated within anorganizational context: PepsiCo Inc. (PEP) is a leading food and beverage company with an impressive globalpresence. Then in 1994, PepsiCo officially entered the Vietnamese market when a jointventure with IBC International Beverage Company with the introduction of the first twoproducts, Pepsi and 7 Up, from the early days when the US removed its embargo againstVietnam in 1994.Pepsi has used many active strategies in its fierce competition withstrong competitors in the Vietnamese market, such as Coca-Cola and other brands. Someof the main reasons include branding and distribution strategy.Pepsi was founded nearly acentury ago. Consumption and reputation are far behind Coca-Cola. But in the first year ofthe 1990s, Pepsi was honoured to be ranked 7th among the ten largest corporations in theUnited States, becoming Coca-Cola's biggest and most potent competitor. This makes theworld's economists look at Pepsi with a completely different eye, and at the same time
makes Coca-Cola feel insecure. The Vietnam beverage market is increasingly fierce, withhigh growth. Each year, domestic and foreign manufacturers continuously launch newproducts or change product packaging. It can be said that Vietnam's drinking water marketis increasingly Westernized with more and more diversified products. Pepper is still youngpeople, aged 15 - 35, to enrich the company's products and meet the needs of customers.For Pepsico's longstanding rival, it is Coca-Cola. In the world market, PepsiCo is still pursuingCoca - Cola. Nevertheless, in Vietnam market, Pepsi is the leader and always a pioneer, sothe high concentration orientation is what PepsiCo needs to have. In order to be able tofocus its financial power more and compete with Coca-Cola in the markets. That is themarketing concept Pepsi has been introduced since the early 1960s.Traditional marketingactivities - PepsiCo customers aim to develop products for themselves as "the newgeneration" for young people. Still, here, Pepsi's carbonated products are suitable foreveryone, from drinks to athletes, everyday people or obese people. It can be said thatPepsiCo's customers are diverse and plentiful. PepsiCo Vietnam always focuses its productdevelopment on customers. Pepsico sponsors charity funds to resonate instead of masspromotion, supporting a national team.
The company's products access the Vietnamese market through the following threechannels: direct store delivery (or DSD), customer warehouse, and third-party distributornetworks. PepsiCo chooses the right distribution channel based on the needs of Vietnamesecustomers as well as product characteristics and local commercial practices.Direct store delivery: Manufacturers sell directly to customers; online stores mostly use this. Under the DSDsystem, PepsiCo distributes items directly to retail stores in Vietnam. Out of the threechannels, DSD allows PepsiCo to sell with maximum visibility as well as empowers PepsiCoto sell shares with the highest awareness. It is more suitable for products that are addedregularly and are sensitive to promotions and marketing and display.PepsiCo Vietnamemployees are required to take new orders from the grocery store and convince thestores and deliver the previous orders to the stores. The employees are even responsiblefor putting products on the shelves. Every day, employees have to meet a specific number ofcustomers. The usual practice is to take manual orders. The staff distributed snacks andbeverages directly to thousands of distribution points ranging from small shops andSource: Suntory PepsiCo (2020)
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