Are sets of interdependent organizations participating in the process of making a product or service available?

A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for use or consumption.

The definition bears some explication. It first points out that a marketing channel is a “set of interdependent organizations.” That is, a marketing channel is not just one firm doing its best in the market — whether that firm is a manufacturer, wholesaler, or retailer. Rather, many entities are typically involved in the business of channel marketing. Each channel member depends on the others to do their jobs.

What are their jobs? The definition makes clear that running a marketing channel is a “process.” It is not an event. Distribution frequently takes time to accomplish, and even when a sale is finally made, the relationship with the end-user is usually not over.

For example, think about an end user purchasing a microwave oven and it demands for post sale service.

Finally, what is the purpose of this process? The definition claims that it is “making a product or service available for use or consumption.” That is, the purpose of channel marketing is to satisfy the end-users in the market, be they consumers or final business buyers. Their goal is the use or consumption of the product or service being sold. A manufacturer who sells through distributors to retailers, who serve final consumers, may be tempted to think that it has generated “sales” and developed “happy customers” when its sales force successfully places a product in the distributors’ warehouses. This definition argues otherwise. It is of critical importance that all channel members focus their attention on the end-user.

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Choose the correct code for the following statements being correct or incorrect.Statement I : A well-chosen marketing channel must be aligned to company's marketing strategy with respect to segmentation, targeting and positioning.Statement II : Marketing channels are set of interdependent organizations participating in the process of making the product available for the use of consumption.  (adsbygoogle = window.adsbygoogle || []).push({});

1. Both the statements I and II are correct.
2. Both the statements I and II are incorrect.
3. Statement I is correct, but II is incorrect.
4. Statement II is correct, but I is incorrect.

Answer (Detailed Solution Below)

Option 1 : Both the statements I and II are correct.

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Statement I: A well-chosen marketing channel must be aligned to the company's marketing strategy with respect to segmentation, targeting, and positioning.

Explanation: 

1. Segmentation, Targeting, and Positioning (STP) marketing is one of the most popular strategic marketing modules used by businesses today, and for good reason.
2. The STP model is an excellent embodiment of the gradual change in focus from a product-centric approach to a customer-centric approach, which enables companies to better understand who they are trying to reach and how to position themselves for success. 
3. STP marketing stands for segmentation, targeting, and positioning.
4. It is a three-step process that allows for the development of a specific and actionable marketing strategy.
5. The main principle behind the process is to segment your audience, target each segmented group according to their preferences and habits, and make positioning adjustments in your branding and marketing strategies to accommodate their needs and expectations.
6. The reason why the segmentation-targeting-positioning process is so effective is that it breaks down broader markets into smaller parts, making it easier to develop specific approaches for reaching and engaging potential customers instead of having to use a generic marketing strategy that would not be as appealing, or as effective.
7. Thus, the marketing channel and strategy should be well-aligned with the company's STP for effective success. Thus, the statement I is correct.

Statement II: Marketing channels are a set of interdependent organizations participating in the process of making the product available for the use of consumption. 

Explanation: 

1. ‘Marketing channels refer to an organized network of interconnected organizations and agencies involved in the process of making a product or service available to consumers.’
2. The marketing channels are interdependent business organizations.'
3. They are also known as the middlemen, intermediaries.
4. There are various forms of these intermediaries.
5. They bear a variety of names. They act as an interface between the firm and its customers.
6. They facilitate the producers and ensure a smooth flow of products/services to the customers.
7.  Richard M. Clewett views as – “it is the pipeline through which a product flows on its way to the consumers.
8. The manufacturer puts his product into the pipeline or marketing channel and various marketing people move it along to the consumers at the other end of the channel”.
9. Thus, statement II is correct.

Thus, option 1 is the correct answer.

Last updated on Sep 21, 2022

The UGC (University Grants Commission) has released the UGC NET Admit Card. The admit card has been released for the exam which is scheduled to be held on 30th September 2022. The admit card for the exam scheduled for 1st October 2022 will be released soon. Candidates can download their admit cards through the official portal. The UGC NET CBT exam will consist of two papers - Paper I and Paper II. Paper I will be conducted of 50 questions and Paper II will be held for 100 questions. 

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