Analysis of the Various Marketing Channels - Term Paper Example

Objective Business organizations are facing intense competition and it is important that they adopt effective marketing channels and good relationship marketing so that the goods that they manufacture get to the end consumers. This paper is meant to analyze the various marketing channels for both the traditional retail business, the internet based business and the importance of the relationship marketing within the marketing channels. Introduction Marketing channels involves two basic component that consist of the physical distribution and the marketing structure .The physical component involves the distribution of goods and services from the manufacturer to the end user who is the consumer. The structure involves all activities that are involved so that the marketing objectives are set and achieved. It also involves a structure for sales and distribution for the goods to reach the customers. The structure also involves how the manufacturers motivate, sells, stores and delivers the goods to the final consumer. For a marketing channel to be effective, it requires that proper communication is effectively done to avoid poor communication. Communication involves advertising, promotions; electronic-mail, telephone conversations and complaints follow up. To be able to design an effective marketing channel, it is imperative that the business analyze customer needs, set up objectives and also be able to evaluate alternative marketing channels for their organization. Marketing channels for retail businesses In the traditional retail business wholesalers, distributors, retailers and the consumers are all involved in the transferring process. Storage and shipping is an important aspect of the marketing channel and it takes place at every level of the distribution channel. It is usually facilitated by players such as warehouse agents and freight carriers. Another aspect of the retail business involves the services that are given to the customer and such activities include providing them with adequate information, training them on all aspects of the product, fulfilling any statutory and legal requirements and facilitation of credit services for the customers (Hennig-Thurau and Hansen 2000). Morrison's company was founded in 1899 by William Morrison. It began as a single egg and butter stall in Bradford, West Yorkshire. This company is one of the largest food retailer supermarkets with 375 stores. It mainly deals with food and groceries. Though big, it does not offer its customers an online shopping service which it is crucial for the expansion of the business. In addition, it has yet to venture into financial services market that is essential This Company is said to have the same prices in all its stores and this has made it win their customers loyalty. Since it has a relatively small size and regional focus. It promotes most of its own products through using its Farmers, Boy and product subsidiaries. By the use of the wholesale model, this has proved to be the focal point in generating the company's profits while at the same time, it has maintained low prices. The company depends on its own subsidiaries to provide products and packagings to all its stores .They also have their own manufacturing facility which is unique to suit their market. The Morrison's company lays its emphasis on freshness, quality, provenance, in-store production, in-season food and their expression of their deep understanding of food. (Hennig-Thurau and Hansen 2000). The company operates its own manufacturing plant and it does its own distribution because all these channels are well integrated. In this company, they match the retail opening hours in all their stores. This chain of supermarkets also focuses on selling fresh food and also offers an employee discount scheme. Promotional offers are used like "half price "rather than "buy one get one free". Internet based business As compared to the traditional retail marketing channel internet based business have grown out the need for intermediaries and a new market structure has come up where the manufactures have shortened the supply chain by delivering the goods direct to the consumers thus bypassing wholesalers,distributors,foreign representatives and any of the retailers in the business. Internet based business allows the use of electronic-commerce in transacting of its business activities. It involves the use of electronic -mails, internet relay chat, portal websites, infomediaries, video conferencing, and news groups. As compared to the traditional method of marketing, internet allows goods to be converted into a digital form and delivered to the customers immediately. The higher the level of intangibility of a product the more it becomes more easier to be marketed on the internet and the higher the likelihood of being marketed on the internet for example telecommunication services, computer software, provision of financial services, database services and also in the film industry (Dibb and Simkin 2004). The company is able to cut on cost by publishing its products on-line and it is also in marketing, advertising and promoting its products through using the internet. It also comes up with a customer oriented strategy geared toward providing the right information to the customers on the web. Once customers are able to find information that relates to their need then they are able to create a strong relationship with the selling company. Internet based marketing channels also help to maximize on the customers convenience and to create a personalized mode of communication with the customers. (Dibb and Simkin 2004). Tesco supermarket was founded by John Cohen in 1919. It has a subsidiary known as Tesco.com that offers home delivery and internet shopping services to all its customers. Tesco supermarket has been making large profits from its online retailing operation. Online retailing is important because it is flexible and most importantly convenient for the customer. They offer a wide range of products that range from electronics, gift items, books and entertainment facilities that can be accessed from the internet. This is a direct marketing channel as it is able to reach their customers directly (Humby, Hunt and Phillips 2007). This retailing strategy enables customers to buy their groceries while at home or for those working in the office. It also has doorstep deliveries as per the customer's request. Tesco supermarket also offers the Tesco club card which has been developed in such a way that it educates, empowers and rewards its customers. This company has embraced the Radio Frequency Identification Development (RFID) technology to increase the distribution process. Apart from the free delivery the company is also able to offer services of free return within 28 working days and an emergency delivery on selected range of products (Varey 2002). Importance of relationship marketing Relationship marketing refers to the concept that is geared towards creating and adding value in the customer based relationships for the organization. It involves developing contacts with ones customers, suppliers and also competitors through collaborative and joint efforts. The concept involves developing and maintaining the loyalty of the customer. It has evolved because of intense competition amongst competitors, eroded brand loyalty by customers and created price wars amongst the competitors. One of the aims of retail marketing is to cultivate a close relationship with individual customers and learn much more about their needs. In this strategy, customer needs are expressed and as a result, their needs are addressed. Direct marketers have employed the art of relationship marketing and online marketing techniques as it has led to increased sales and feedback for the customers (Varey 2002). These relations in the marketing channels are becoming important because they assist in creating value by bridging the gap between possession, time and place that separate the manufacturers with the consumers. Intermediaries involved are also important because they are meant for adding value to the company by keeping contacts with the external environment, they have experience, and most of them have areas of specialization and wide scope of areas in operations. These marketing channels assist to increase sale generated because of the wide area of coverage. It is very crucial that all organizations adopt a marketing relationship for its members throughout the marketing channel .The importance of the marketing channel is to assist the managers in getting and disbursing information, assist in performing promotional activities, helps in keeping contacts with the current and prospective customers. It also assists in matching the demand for goods with their supply and finally in assisting in transfer of ownership of goods from the manufacturers to the end consumers. References Dibb, S and Simkin, L 2004, marketing briefs: a revision and study guide, Edition: 2 Butterworth-Heinemann, United States of America. Drummond, G and Ensor, J 2005, Introduction to Marketing Concepts, Butterworth- Heinemann, United States of America. Gay, R, Charlesworth, A. and Esen, R 2007, online marketing: a customer-led approach, Oxford University Press, United States of America. 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