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.
- Both the statements I and II are correct.
- Both the statements I and II are incorrect.
- Statement I is correct, but II is incorrect.
- 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:
- Segmentation, Targeting, and Positioning (STP) marketing is one of the most popular strategic marketing modules used by businesses today, and for good reason.
- 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.
- STP marketing stands for segmentation, targeting, and positioning.
- It is a three-step process that allows for the development of a specific and actionable marketing strategy.
- 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.
- 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.
- 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:
- ‘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.’
- The marketing channels are interdependent business organizations.'
- They are also known as the middlemen, intermediaries.
- There are various forms of these intermediaries.
- They bear a variety of names. They act as an interface between the firm and its customers.
- They facilitate the producers and ensure a smooth flow of products/services to the customers.
- Richard M. Clewett views as – “it is the pipeline through which a product flows on its way to the consumers.
- 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”.
- Thus, statement II is correct.
Thus, option 1 is the correct answer.
Last updated on Sep 21, 2022
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A marketing channel is a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.
Consider a scenario in which there are five manufacturers, no intermediaries, and four consumers. Twenty transactions would be required for each consumer to receive products from each manufacturer. The introduction of one intermediary reduces the required number of transactions to four and demonstrates the idea of contact efficiency.
false - Introducing one intermediary reduces the required number of transactions to nine.
The internet is quickly becoming an alternative channel for delivering services.
A _____ is a business structure of interdependent organizations that are involved in the process of making a product or service available for use or consumption by end customers or business users.
- a. facilitating agency or place member
- b. marketing mix intermediary
- c. selective distribution channel
- d. marketing channel or channel of distribution
- e. transportation channel or channel of movement
D - This is the definition of a marketing channel, also called the channel of distribution.
This summer, college student Pat is planning on selling kites at Panama City Beach. He has found some suppliers and he preordered all of the kites he thinks he can sell this summer. What type of a distribution channel relationship does Pat have with his suppliers?
- a. arm's-length
- b. functional
- c. cooperative
- d. hierarchical
- e. integrated
A - The arm's-length relationship is considered to be temporary.
DeBeers sells most of the diamonds it produces to industry. The company controls over 90% of the market and has great power over its distributors. In its marketing channel, DeBeers would be considered a:
- a. channel authority
- b. channel member
- c. channel leader
- d. channel gatekeeper
- e. power broker
C - The channel leader or channel captain is a member of a marketing channel that exercises authority and power over the activities of other channel members. DeBeers has control over delivery, inventory, and so on.