The paper "Marketing Channels Issues" is a perfect example of a marketing assignment. Transplanting a channel design from one country to another is usually a bad idea from the perspective of the demand-side gap. To begin with, there must exist the necessary structural infrastructure for the consumer to efficiently utilize the channel in order for it to be acceptable to them. Since structural infrastructure capacity differs from one country to another, what works in one country may not necessarily work in another. Modification is necessary to ensure that a channel is accommodated in the existing structural infrastructure or that infrastructural issues are addressed.
This includes government policies from the demand side to ensure that the product is acceptable and does not contradict already set policies. It is for this reason that online bill payment may be effectively applied to some countries and not others. In addition, such channels lack end-to-end capability whereby there is a link between the levels of the chain enhancing business to business channels (Coughlan et al 2006). The idea of unmodified channel designs may result to demand gaps whereby target consumer does not have comprehensive information about the product.
As a result, channel flow costs may increase as a result of target customers being unsure of what to buy. End users in this case unintentionally purchasing the wrong product or try to reduce the risk of purchasing the wrong item by buying multiple sizes of the same product intentionally, hence increasing the product return rate. This increases channel flow costs. In addition, the company may confuse this for increased demand for the product and in reaction, increase production for the product.
This not only results in increased channel flow costs but overproduction as the company tries to avoid stocking out of the product in demand as well. The management cost of the payment increases since credits must be issued to customers for product returns hence increasing the cost of monitoring. In the worst-case scenario, customers who may not be aware of restocking fee may be lost to competitors due to dissatisfaction with received services or the brand. Lastly, clients may be dissatisfied in cases where they are concerned with the time taken for a delivery to be made.
This happens when a wrong product is delivered just to be returned for an exchange or refund. Customer choice or preference may differ from one country to another in relation to variety/ assortment and bulk breaking. This means that low level of assortment or bulk breaking may not be an issue in one country but this may impact on the marketplace acceptance of the product in another country. It is, therefore, necessary for the customer needs to be assessed and the channel be modified accordingly.
Failure to do this is likely to result in limited success or high operation cost being incurred during production and marketing. In addition, low price strategy may work in one country and fail in another where product quality in terms of assortment/variety is more important to consumers as compared to cost (Coughlan et al 2006). This results in a service-value gap on the demand side as the services are perceived to be too low. For instance, a certain album may be on a hit in one country but in another country, only one song attracts consumers.
Bulk breaking in this regard will be important to meet the demand s of the customers not having to buy the entire album. Lack of this may result in target customers opting for online music downloads.
ReferenceCoughlan, AT, Anderson, E, Stern, LW & El-Ansary, AI 2006, Marketing channels, 7e, Prentice Hall, Upper Saddle River, NJ.