Designing and Managing Value Networks and Marketing Channels
Most companies have a similar method of functioning when it comes to the supply chain. They start off by getting raw materials, they use their resources to turn the materials into products, and lastly, they distribute those products to their consumers. But in order to develop a partnership with their stakeholders, companies will have to learn to adapt. Namely, they will have to transform the supply chain as it is into a value network.
Value Networks and Marketing Channels
The primary purpose of value networks comes in the form of creating partnership and value during the supply chain process. Namely, a value network creates those values during production, purchasing, and selling of products. And of course, the primary goal of value networks is to achieve an increase in productivity, and as a result of that, increased revenue and a decrease in costs.
One of the big steps companies are taking in the 21st century is taking their businesses online. The procurement process can be handled a lot faster and more accurately on the Internet. Business partners know their roles and how they influence the normal operations of the business.
On the other hand, we have the marketing channel. This distribution channel is what companies use to supply their products to their customers. Most companies are willing to invest significant amounts of resources to set up functioning marketing channels. After all, they are integral to the promotional activities of the company.
Marketing Channels
All companies are trying to create products that satisfy the needs of the market. Some companies can decide to create products without the forethought. However, that can lead to operational difficulties.
For that reason, it is always important for companies to use marketing channels as their eyes and ears. Marketing channels can give companies a lot of valuable data. They can use marketing channels to learn about their customers or competitors.
Moreover, marketing channels can be very important for organisations that aren’t trying to make a profit. Namely, hospitals and firefighters can leverage the data they can get from channels of communications as well. With that data, they can strategically place their ambulances and fire stations to improve response times.
The Design Management, Evaluation,
and Modification of Marketing Channels
In order to successfully design marketing channels, companies have to understand what their customers want. And they can get that understanding by analysing the preferences and the needs of their customers.
The second thing marketing channel designers have to consider is the overall objective of the company. That especially goes for the output levels and the cost limits the company asks for.
Furthermore, companies have to decide on which channels of marketing they want to use. Depending on the customers, companies might want to use direct marketing, mail, or any other channels of communication. But no matter which channels get to the short list, they all have to go through an evaluation process. Companies should focus on operational value, cost-effectiveness, and flexibility of the marketing channel.
Once a channel is designed, it is important to manage it properly. Every partner should have a positively impacting image for the company, and companies need to have a way to closely monitor their marketing channels. Any form of feedback can be useful, as companies should always modify their channels for more productivity.
New Trends
Companies are always trying to find ways to stand out from the crowd and outperform their competitors. And over time, their efforts have led to the rise of multiple types of marketing channels.
There are three common types we want to discuss. For starters, we want to mention the vertical marketing channel. In this channel, the traditional split of producer-wholesaler-retailer becomes a single unit. That is fairly common with companies that are owned by a single entity or franchises.
On the other hand, we have the horizontal marketing channel. That channel includes multiple agencies that combine their efforts to use various market opportunities.
Lastly, there is the multi-channel system. In this system, companies use a variety of different channels and in order to target different customers.
Conflict Management
Conflicts can happen between members of the same channel, different channels, or even similar providers. And companies should try to resolve the issues instead of dissolving the channel.
Conflict resolution starts by identifying the cause of the issue. Once the cause is identified, companies should manage the conflict by setting up clear mandates for the members and their overall roles in the process. And finally, companies can use diplomatic approaches to resolve conflicts. Some of the most popular methods include exchanges of team members or joint memberships.
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