Page 397 - Foundations of Marketing

364 Part 5 | Distribution Decisions

Table 13.1 Marketing Activities Performed by Intermediaries

Marketing Activities Sample Activities
Marketing information Analyze sales data and other information in databases and
information systems. Perform or commission marketing
research.

Marketing management Establish strategic and tactical plans for developing customer
relationships and organizational productivity.

Facilitating exchanges Choose product assortments that match the needs of
customers. Cooperate with channel members to develop
partnerships.

Promotion Set promotional objectives. Coordinate advertising, personal
selling, sales promotion, publicity, and packaging.

Price Establish pricing policies and terms of sales.
Physical distribution Manage transportation, warehousing, materials handling,
inventory control, and communication.

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purchased the Advil on its shelves from a wholesaler. The wholesaler purchased that pain
medicine, along with other over-the-counter and prescription drugs, from manufacturers like
McNeil Consumer Healthcare.
Supply-chain management should begin with a focus on the customer, who is the ulti-
mate consumer and whose satisfaction should be the goal of all the efforts of channel mem-
bers. Cooperation between channel members should improve customer satisfaction while
also increasing coordination, reducing costs, and increasing profits. According to Deloitte
Consulting, up to 70 percent of a firm’s cost base can be traced back to its supply chain. For
this reason, firms are usually interested in taking steps that allow them to reduce waste, such
as cutting down on energy requirements. Improving coordination between supply chain mem-
bers can help achieve fewer wasted resources and greater speed, and leads to increased envi-
9
ronmental sustainability—which can improve a firm’s image in the eyes of many consumers.
When the buyer, seller, marketing intermediaries, and facilitating agencies all work together,
the cooperative relationship results in an increased ability to meet customers’ expectations
regarding delivery, scheduling, packaging, and other requirements.
Each supply-chain member requires information from other channel members. For
instance, suppliers need order and forecast information from the manufacturer and availability
information from their own suppliers. Customer relationship management (CRM) systems
exploit the information in supply-chain partners’ information systems and make it available
for easy reference. CRM systems can help all channel members make better marketing strat-
egy decisions that develop and sustain desirable customer relationships.

The Significance of Marketing Channels
Although it is not necessary to make marketing channel decisions before other marketing
decisions, they can have a strong influence on the other elements of the marketing mix (i.e.,
product, promotion, and pricing). Channel decisions are critical because they determine a
product’s market presence and accessibility. Without marketing channel operations that reach
the right customers at the right time, even the best goods and services will not be successful.
Consider that small businesses are likely to purchase computers from chain specialty stores,
such as Best Buy and Office Depot, putting computer companies without distribution through

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