Value networks in marketing channels

One of the many ways that you can add value to a channel is by building value networks in Marketing channels. As discussed in the article on Marketing channels, the channel is made up of a chain of people. This chain will constitute of the C&F, the distributor, the dealer and finally the retailer.

Overall, each of these people within the chain are contributing value so that the value reaches the end customer. How they contribute value differs overall. Here are some ways that value can be imbibed in the marketing channel

1) C&F level – The C&F has to maintain optimum finances at any given point of time because the company might want to stock him with good stock of products. He also needs to have a strong inventory tracking so that he can track the inventory given to each distributor in turn.

2) Distributor level – The distributor is responsible for sales as well as supply. So his systems should be inbound as well as outbound. He needs to track the inventory which is coming in as well as the supply which is going out. He has to maintain the product of small bulks at optimum quality levels. And ultimately, he has to ensure that he has the right retail channel for the company to support product sales.

3) Dealer or retail level – The retailers, like the distributors are tracking inbound and outbound material movement. But over here, the customer is direct in touch. The company has to ensure that the customer is getting the best service, the ambience of the retail outlet is good. As per holistic marketing, your customer touch points and how you handle customers is critical in brand building.

Hence the maximum value can be built at the retailer point by ensuring material reaches safely from C&F to distributor and distributor to retailer. It is the retailer who will face maximum pressure from the customer, and if this pressure increases, the pressure will come back to the company.

In the end, if the retailer is not happy, the customer is not going to be happy. And this breaks the value network. Thus, each and every level of the value network in the marketing channel has to be observed so as to ensure that maximum value reaches to the end customer. This helps the firm in Holistic marketing, it helps the firm in brand building and subsequently it helps the firm in revenue generation and margins.

This is not only applicable in the product field, but in the service field as well. Take a restaurant for example. Right from the vegetable and meat supplier, to the cook, the ambience and finally the waiter and even the cleaner, are all part of the value network of a marketing channel. If the value network is strong, the channel is strong.