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Week 6, "Using Marketing Channels and Price to Create Value for Customers" was derived from Principles of Marketing, which was adapted by the Saylor Foundation under a Creative Commons Attribution- NonCommercial-ShareAlike 3.0 Unported license without attribution as requested by the work's original creator or licensee. © 2015, The Saylor Foundation. Week 6 Using Marketing Channels and Price to Create Value for Customers Sometimes when you buy a good or service, it passes straight from the producer to you. But suppose every time you purchased something, you had to contact its maker? For some products or services, such as a haircut, this would work. But what about the items you purchase at the grocery store? You couldn't begin to contact and buy from all the makers of those products. It would be an incredibly inefficient way to do business. Fortunately, companies partner with one another, alleviating you of this burden. So, for example, instead of Procter & Gamble selling individual toothbrushes to consumers, it sells many of them to stores, which then sell them to everyone. The specific avenue a seller uses to make a finished good or service available for purchase—for example, whether you are able to buy it directly from the seller, at a store, online, or from a salesperson—is referred to as the product's marketing channel (or distribution channel). All of the people and organizations that buy, resell, and promote the product "downstream" as it makes its way to you are part of the marketing channel. Likewise, price creates value for customers and is the way the company makes its revenue and profit by exchanging value with the customer. When Chick-fil-A opens new locations, the company offers the first 100 customers a free meal every week for a year. Customers camp out overnight to get in line for the free meals. When KFC introduced its grilled chicken, the company put coupons good for a free piece of chicken in many Sunday newspapers. So how do sellers make any money if they always offer goods and services on sale or for a special deal? Many sellers give customers something for free, hoping they'll buy other products, but a careful balance is needed to ensure profit. Price is the only marketing mix variable or part of the offering that generates revenue. Buyers relate the price to value. They must feel they are getting value for the price paid. Pricing decisions are extremely important. So how do organizations decide how to price their goods and services? This week, we explore both distribution and price as a means to add value for customers. 6.1 Marketing Channels and Channel Partners LEARNING OBJECTIVES 1. Explain why marketing channel decisions can result in the success or failure of products. 2. Describe the types of organizations that work together as channel partners and what each does. Today, marketing channel decisions are as important as the decisions companies make about the features and prices of products (Littleson, 2.
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The Long Tail
1.
By Mantaza Assyaed
(AKA MINTY) The Long Tail
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ANY QUESTIONS
Download now
![What is The Long Tail? ,[object Object],[object Object],[object Object],[object Object],[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)