Marketing / applied channel system Essay Example

Q1. For each of the three scenarios below categorize the demand for bulk breaking, spatial convenience, waiting time / delivery time, assortment/ variety as high, medium or low in each case explain your answer for three case:

Case-I:

A woman in an emerging market country of Southeast Asia wishes to buy some cosmetics for herself. She has never done so before and is not entirely sure of the occasions on which she will wear the cosmetics she does not live near a big city she is too poor to own a car but has bit of extra money for a small luxury.

Analysis:

For the given case, the service output demand level can be analyzed as under:

Service Output	Descriptor	Service Output Demand Level
Bulk-Breaking	She only needs some cosmetics for herself. She at the same time is not sure of a regular use as she even not sure of occasion on which she will wear these cosmetics.	High
Spatial Convenience	She is poor women with no car. Moreover she does not live near a big city and can’t travel far to buy these cosmetics.	Low
Waiting And Delivery Time	Cosmetics are not the necessities for her and she would not be so desperate for the same.	Low
Assortment And Variety	She is not sophisticated as a purchaser and would be happy with even a limited variety to choose from.	Medium
Customer Service	She has never bought any cosmetics before and needs help to choose among plethora of choices available in the market.	High
Information Provision	Though there are plenty of information available in the market, she is not referring to any information available for the making an informed decision.	High

Further, the appropriate channel which would be catering well to the given case can be depicted as under. The cosmetics are manufactured and then the wholesaler distributes it to small retailer who ultimately will sell it to the end users or consumers.

Case-II:

A manufacturer uses a particular industrial chemical in one of its large scale production processes and needs to buy more of this chemical. The rest of the raw materials for its plant operations are delivered in a just in time fashion.

Analysis:

For the given case, the service output demand level can be analyzed as under:

Service Output	Descriptor	Service Output Demand Level
Bulk-Breaking	The manufacturer needs the chemical raw material for its large scale production and would need the same in bulk. Moreover, it has to carry a large inventory of the chemical as other raw materials are supplied on just in time basis.	Low
Spatial Convenience	The operational manufacturing plant would have a proper transportation in place to procure the same or to get it delivered by the supplier at its manufacturing site.	Low
Waiting And Delivery Time	The chemical forms a vital raw material for the manufacturing process and is continuously needed for an ongoing production in appropriate quantity. The unavailability of this chemical would be a show stopper.	High
Assortment And Variety	The unique chemical composition of this raw material makes the manufacturer indifferent to any choice in terms of variety.	Low
Customer Service	The manufacturer hardly needs any help in terms of choosing the chemical. It has a clear requirement and would get exactly what it needs.	Low
Information Provision	The manufacturing process and requirement of the chemical as the raw material has already been depicted and the same need to be strictly adhered to without any additional information need.	Low

Further, the appropriate channel which would be catering well to the given case can be depicted as under. The chemical would have been made by some manufacturer. A business supplier would then supply the same to the business consumer.

Case-III:

Before you visit certain parts of the world, you are required to get a yellow fever vaccine. Many travelers let this slip until the last minute, forgetting that it is advisable or (or avoiding an unpleasant shot as long as possible) but they definitely realize they need the shot, and they do not want to cancel their trip at the last minute because they did not get it. They often find themselves making a long trip to a regional medical center because they did not plan ahead.

Analysis:

For the given case, the service output demand level can be analyzed as under:

Service Output	Descriptor	Service Output Demand Level
Bulk-Breaking	The vaccine for yellow fever is needed for individual use. As such, the consumable unit has to be for individuals only.	High
Spatial Convenience	The end user will travel to the required vaccination center for get the shot. Moreover, the vaccine has to be made available in places from where people need to fly abroad. As such there are only limited destinations for distribution needs.	Low
Waiting And Delivery Time	The vaccine shot is mandatory before the travel to some of the specific part of the world. Foe those travelers, it is a necessity and they have to manage it anyhow.	High
Assortment And Variety	There is hardly any scope for variety in the vaccine shots.	Low
Customer Service	The end users do not need any help to decide on the choice.	Low
Information Provision	The requirement of the vaccine shot has already been depicted and the same need to be strictly adhered to without any additional information need.	Low

Further, the appropriate channel which would be catering well to the given case can be depicted as under. The manufactured vaccines would be distributed by wholesaler to the medical centers where the end users or travelers can get the vaccine shots.

Q2.

Case I:

If consumer buys an item through a catalog over the phone with credit card, is the credit card company a channel member? If yes, what flows does it perform?

Case II:

If the product is delivered by Fedex, is Fedex a channel member? If yes, what flows does it perform?

Analysis:

In order to decide whether an associate entity is a channel partner or not, let us understand the definition first. A marketing channel is a set of interdependent organisations involved in the process of making a product or service available for use or consumption. Thus any entity serving a role to achieve the aforesaid purpose will be a channel partner. To analyse this better let us focus on the role played by these channel partner vis-a-vis the market flows. There are basically eight market flows which usually happen among the channel partners (Vaile, Grether, & Cox, 1952). These are associated with getting physical possession, ownership, promotion, negotiation, financing, risking, ordering and payments (Stern et al, 2001).

Various channel partners perform specific tasks. Like various marketing research agencies work on disseminating information across the channel. Various media companies work on promotions and advertisements. Logistics companies help in transporting goods from one place to other. Whereas warehouse help in storing the inventory of goods. There are various financial institutions like banks and factoring agencies which help finance channel activities. At the same time there are some insurance partners who indemnify the channel activities against various risks.

When a consumer buys an item through a catalog over the phone with credit card, the credit card company definitely is a channel member. The given case forms part of a multi-channel channel distribution system which can be depicted by the arrow as under:

Catalogs, telephone & Credit Card

N

Financing

ow the credit card company forms part of the channel based on the criterion of market flow. The credit card company at the first place is financing the purchase of the end user. At the same time, it is also getting the payment released from consumer end, though on credit, and delivering the same to the retailer against the demand of the purchase order.

Company

Card

Credit

Retailer

Consumer

Payments

Thus the credit card company is an integrated part of the market flow performing two vital operations in the overall supply chain. Based on the analysis it is clear that the credit card company becomes an integrated channel partner in this case. Though in this case the credit card company is not an apparently visible to the parties it is interacting i.e. the end user who is paying through credit card and the retailer to which the payment is target to for the purchased. Thus we can assume a virtual channel partner between retailer and the end user. This virtual channel partner executive the market flow of financing and payment is the credit card company (Alba et al., 1997).

Now as per the second case, the product is delivered by Fedex which is acting as a freight forwarding agent. The freight forwarding agent acts as an intermediary for giving the physical passion of the product to the end user. It takes the possession of the product from the retailer or the distributor and delivers to the end user, wherein the two parties are not in physical proximity or when the end user in not visiting the physical outlets for purchasing the product.

Physical Possession

Retailer

Consumer

Fedex

Thus Fedex as a freight forwarding agent makes an important part of the supply chain and hence becomes a channel partner. There could also be a possibility in this case that the product being a part of reverse logistics, and is being delivered back from the end user to the retailer or the manufacture. This often happens when the products are retuned back by the end user in case they are not received in the form they are desired to be. In both the cases, the freight forward agent is a channel partner which executes the market flow associated with physical possession of the product.

References:

Alba, J., Lynch, J., Weitz, B. A., Janiszewski, C., Lutz, R., Sawyer, A., et al. (1997). Interactive Home Shopping: Consumer, Retailer, and Manufacturer Incentives to Participate in Electronic Marketplaces. Journal of Marketing, 61(July), 38-53.

Dvorak, R. and van Paasschen, F. (1996). Retail logistics: one size doesn’t fit all. McKinsey Quarterly. Issue 2. pp.120-129.

Fisher, M. L. (1997). What is the Right Supply Chain for Your Product? Harvard Business Review. Mar/Apr, Vol. 75, Issue 2. pp.105-116.

Stern, L.W., El-Ansary, A.I., Coughlan, A.T. & Anderson, E. (2001). Marketing Channels. 6^th ed. Prentice Hall. Upper Saddle River. New Jersey.

Vaile, R. S., Grether, E. T., & Cox, R. (1952). Marketing In the American Economy. New York: The Ronald Press Company.