Segmentation for Marketing Channel Design - Coursework Example

Topic: Segmentation for marketing channel design Name: Professor: Institution: Course: Date of Submission: 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 a bit of extra money for a small luxury. In consideration to above scenario of a woman in the Southeast Asia who wants to purchase some cosmetics in a rural area the channel of distribution should therefore involve the different people who will be used to reach the woman conveniently. The manufacturer gets the products ready in the industry with a variety of cosmetics that vary in price and specifications. The distributor purchases the cosmetics in bulk and sells them to the wholesaler in large quantities. The retailer purchases the product in smaller quantities and according to the demand of the cosmetics in the area that he or she is retailing from. For the case of the rural cosmetic shop the retailer purchases the fast moving cosmetics and also a fewer newly introduced cosmetics. The woman will go to the cosmetics retail shop (Hooley, et al, 2008). The retailer will be able to give advice on the various cosmetics in store and the occasions that can fit to them. The service output demand in this case is that the customer needs convenience and also information in regard to the cosmetics. The retailer should consider the delivery of the product within the reach of the consumer who might visit the shop in need of the cosmetics. The retailer should also gather helpful information to educate the consumer who might not be having ample information like for the occasions in which she should use the cosmetics. The following diagram is used to describe the best path. 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. What really matters for industrial manufacturers is to produce what the customer needs in time, consider the quality to maintain the commodity in the market and also be cost efficient on the side of the consumer (Hooley, et al, 2008). These considerations may affect the channel of distribution that is involved in acquiring raw materials used in chemical production. In this scenario for the manufacturing company there are things to consider like; Quality – where the chemical must be of good quality to ensure that the end product is of good quality. Cost- the chemical must be cost effective not to cause extreme rise in the cost of the end products. Time – the chemical must be delivered in time to ensure that the products are also delivered in time and the consumer is satisfied at the right time. The rest of the materials are delivered in a just in time fashion meaning that they are only delivered when needed. The chemical which is in use severally in the industry has to be delivered regularly and in order to cut down the cost and time the industry may use a direct channel from the manufacturer. Direct channel in this case offer cost and time effectiveness. The figure below represents the channel of chemical distribution that the industry needs to follow. Fig 2: Channel for chemical product for an industry Before you visit certain parts of the world, you are required to get a yellow fever vaccine. Many travellers let this slip until the last minute, forgetting that it is advisable (or avoiding an unpleasant shot as long as possible). But they definitely realize they need the shot, and they do not want to have 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 centre because they did not plan ahead. The people travelling in this case require a service that can only be delivered by specific professional. The yellow fever vaccine is only given by doctors who are qualified within specific health institutions mostly regionally situated. The channel for this service must be direct where the customer involved being the person who wants to travel must get an appointment directly to the doctor who will offer the vaccination. Time consent in this case is very crucial and since there are no middle men involved, time planning would be important to ensure that one get the vaccine in time (Lamb, Hair & McDaniel, 2011). The diagram below represents the channel for the vaccination that only works well with proper time management on the part of the patient in arrangement of getting the vaccine in time. Quality in this point is assured and that is why it is only provided in specific hospitals. Fig 3: Channel for medical service Credit cards are used to pay for goods purchased online either through the phone or on computers. The online methods of buying ease the channel by giving a direct advantage to the consumer in terms of any unnecessary cost and time. It is very convenient and the consumer is able to compare prices and gives the choosing. For other marketing channels cash and cheque is the common means of payment. For online catalogues, credit cards are used as a means of payment to replace the cash and cheques. Credit cards therefore are not members of the marketing channel (Rosenbloom, 2011). A channel member has to be a business that facilitates the marketing channel of which a credit card is not a business but a means of payment. It is true that a transaction is not complete without payment but the means of payments are not termed as a channel member. The functions of a channel member is financing inventory, risk taking, negotiating and matching the consumers’ orders, promotion and contacting the other intermediaries. These obligations cannot be taken by the credit card and therefore it is not a channel member. The common members of marketing channel are; Producers/ manufacturers Wholesalers/distributors Retailers Agents/brokers Consumers The marketing channel is said to be complete when the goods produced reaches the consumer in a fast and cost effective way. The members of the channel are the intermediary groups that are involved in the channel from production to consumption. Credit card being a means of payment therefore cannot be termed as one of the intermediaries in the marketing channel but it is a means of fulfilling the purchasing process online. Credit card does not form any intermediary of any kind in facilitating the marketing channel and can therefore not be termed as a channel member (Lamb, Hair & McDaniel, 2011). Goods purchased online need to be delivered to the intended customer and various logistics companies are involved in the delivery process. The online consumer deals direct with the producing company making it a direct channel and the transport is necessary to ensure that the transaction is complete. Like any other channel of distribution where goods must be transported from one area to the other until they finally reach the designated consumer, various means of transport are used for this (Scott, 2010). Fedex in this case being the logistics company that facilitates the supplier or manufacturer side to ensure that goods reach customer in time. A channel member can be defined as any business that is involved in the marketing channel to ensure that the channel of distribution is completed. Fedex is acting on the side of the supplier to reach where the supplying or manufacturing company that is selling its products online reach the designated customer. The medium of communication being internet there is no physical delivery or exchange of goods. The transaction is complete with the delivery of the product upon the consumer which at this point is done by the Fedex logistics company. The logistics company is a channel member since for the case of payment the supplier can get the cash direct from the consumers credit card but the supplier has to use a transportation means to get the products to the end user. The flow that is performed by the Logistics Company Fedex is to ensure that the purchased good reach the consumer in the shortest convenient time possible and ensure that the delivery document is signed on behalf of the supplier. The logistics company bears the risk, finances the inventory, and contacts the consumer on behalf of the supplier, matches order to the requirement among other duties performed by the channel members (Hooley, et al, 2008). The logistics company takes the responsibility of the supplier and makes the customer satisfied. They also take the risk on behalf of the supplier where they are able to cater for any loss from the point of sale to the delivery point. They are the people who get physical contact to the consumer other than the supplier who only contacted the consumer online. The flow from the producer or supplier to the consumer in case of internet trading is must be facilitated by a third party company like the logistics Fedex. References Lamb, C, W, Hair, J.F. & McDaniel, C, 2011, Essentials of marketing, Cengage learning; New York. Rosenbloom, B, 2011, Marketing channels, Cengage learning; New York. Scott, D, 2010, The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly New Rules of Marketing & PR: How to Use Social Media, Blogs. Edition2. John Wiley & Sons, 2010 Hooley, G et al, 2008, Marketing Strategy and Competitive Positioning. Edition4, Prentice Hall Read More