Reflection 10 – Marketing Channels
Marketing channels include firms that have partnered together for their common good. Muddy Buddy bars will be made and distributed by General Mills. While it will be the maker of the product, many companies will have a stake in the final delivery to the consumer. For General Mills to be successful it must establish relationships with raw material suppliers for materials such as packaging and raw ingredients for its recipes. It will have a manufacturing center shared with other General Mills product lines. It will utilize distribution centers nationwide to get its product to wholesalers in various cities. Wholesalers will in turn get its product to assorted retailers who will then sell to consumers.
Individual channel success depends on overall channel success; therefore motivation is strong to encourage all channels work together smoothly. Occasionally, channel conflict can occur. Channel conflicts occur in two fashions and are generally over goals, roles, and rewards. Horizontal conflicts occur among firms at the same level of the channel. In the case of General Mills and the making of Muddy Buddy bars, a horizontal conflict may occur with its competitors if it prices itself below the competition thus driving prices down. Since Muddy Buddy bar’s will be offered at a higher price than its competitors, a possible cause for horizontal conflict may be that Muddy Buddy bars is offering a higher value to its consumers thus making the price and value competition. Vertical conflict occurs between different levels of the same channel. This is when producers, wholesalers, and retailers act as a unified system. One channel member owns the others or has enough power to inflict cooperation. An example of this may be if Wal-Mart will only sell Muddy Buddy bars in bulk and will not carry its product if distribution to other box stores is done in other forms than bulk. Wal-Mart has enough pull to motivate General Mills to eliminate individual bar sales to box stores if it wants to keep Wal-Mart as a retailer.