Before taking this class, I had very little knowledge about marketing intermediaries (with regards to the value they bring to the table) and had no idea that a channel had so many components. After going through the online distribution strategy modules, I have developed an appreciation for each member in the value chain delivery network. As a consumer, when we buy a product, whether it is an article of clothing, a car, or a household appliance, very little thought is given as to how that product got into your hands. Growing up, I had this preconceived notion that they must get their inventory from a supplier and that was it, however, the more informed me now realizes that it is much more of a complex process. Depending on the channel structure, for us as consumers to receive our good, a vast network of players could potentially be involved (often times behind the scenes), each adding value in their own certain way to the overall process. We also often never wonder how it is prices are set. The most common way prices are set is due to markups, meaning, each member in the channel marks up the product from the price they paid for it. The more and more players there are, the higher the price will be by the time it hits consumers, which is another reason for disintermediation, which I will be talking about later on in this post. However, intermediaries do have advantages, in that they offer their contacts, experience and specialization. Although it is true an effective channel makes the overall value delivery network more efficient, more players in the game also means there is more risk involved, in that each person is somewhat dependant on one another and has less control over the overall operations. Disintermediation was a trend that was discussed in our online discussion forum and briefly talked about in class, and it is something that poses a threat to all intermediaries and channel members. With today’s economic state and technological age, there is an increased pressure on intermediaries to show that they add value to the overall operations. This can be seen in how Netflix and other online media functions that provide superior value to consumers(ease of access), have cut out stores such as Blockbuster and Rogers video out of their piece of the pie.
