Question

Suppose that a stаrt-up compаny is offering an innovаtive product that manаgement hopes will estаblish a new product catеgory, what forces will tend to lеad the company to mаrket the product though chаnnel intеrmediaries rather than dirеctly? What charаcteristics of an early mаrket will tend to lеad the compаny to mаrket the product directly to finаl customers?

(250 words minimum) and I will really appreciate it if you avoid using Plagiarism, thank you

Answer 1

Answer:

For a start up company offering innovative product in the market, the company may be required to use channel intermediaries rather than direct selling for the following reasons:

1. When the company cannot reach to the final customers and the channel intermediaries are located in the proximity of the customers.

2. When customers are highly loyal to the retailers and the wholesalers such that they do not entertain the new market entrants.

3. When the cultural background of the company and that of the customers differ very widely and the culture of the intermediaries relate to the culture of the customers.

4. When entry into the new market is highly difficult and competitors are applying their forces to restrict the easy entry of the company into the market.

5. When company has not done sufficient market research and do not know the customers in terms of their taste and preferences.

The characteristics of an early market that would tend to lead the company to market the product directly to final customers are:

1. Easy entry of the company in the market that enables the company to freely sell its goods and services.

2. When customers are less loyal and can easily switch to the substitute product so that company can attract the customer to switch to its products.

3. When customers in the market want to try some new product rather than the available brands.

4. When company has suitably segmented the market and has defined its target customers.

5. Ehen Company’s culture and the culture of the market matches with each other in such a way that the communication between the company and the customers becomes very easy.

6. When market is price sensitive so that if the company offers the product at slightly lower price, then the customer switches to the company’s products.