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Channels + Partnerships (Strategies for Market Coverage (Exclusive…

- - - - Producer can maintain control over their offering + profitability
      - Can build strong customer relationships
      - Tech like the Internet is helping manufacturers to reach customers directly. EXAMPLE: Adobe Reader by Adobe Systems Inc. allows users to read + share electronic documents. It's processed + distributed electronically which increases cost efficiency of delivery
      - Can speak to end users + find out how satisfied they are. If this info comes from intermediaries it could be distorted
    - - Large amount of capital/resources needed to reach customers. This means there's not really any economies of scale
      - Producers could have low variety in their products, which might not meet customer needs. E.g Customers won't shop for "fast-moving consumer goods" like bread + milk in different places owned by different manufacturers, bc of the time cost + inconvenience
      - When dealing w/ a big market, it's complicated to deal with every individual alone as a producer. Ppl are all over the place + have different needs at different times = Hugely Fragmented Market
  - - - Intermediaries have logistics facilities to help get products around the world quickly + easily. Know about local markets + help pitch goods to stand out from competitors
      - Help cash flow w/ funding + getting money back from sales
      - Can serve more customers w/ this infrastructure: helps business scale = amplification effect
    - - Communication: may be distortion from customer message back through the intermediaries to the manufacturer
      - Have to pay a share of the profits
      - May represent more than one company, + will prioritise the one paying them the most: don't expect loyalty!
  - - - Increased reach: using existing direct networks + the relationships of intermediaries means reaching a wider target audience
      - Producer control: producers have more control over prices + messages + can reach customers directly
      - Greater compliance: intermediaries can see producers as competitors, + so comply w/ channel rules
      - Optimised margins: producers can improve margins from the direct channel element, + increase their bargaining power as they become less dependent on intermediaries
      - Improved market insight: developing relationships w/ direct customers means producers can get a better understanding of their needs + market issues
    - - Sharing of profits among channel members can cause conflict, especially when intermediaries perceive the manufacturer as a competitor as well as a supplier
      - Structure may confuse/alienate customers who are confused about which channel they should use