Marketing Channels and Price to Create Value for Customers



MarketingChannels and Price to Create Value for Customers

MarketingChannels and Price to Create Value for Customers

  1. There are several factors that influence marketing channels adopted by a product or service provider. Some of the basic factors include the type of product or service offered, the targeted customer, capabilities of channel partners, business environment and technology. Wells Fargo offers banking and financial services to individuals and institutions. Due to the nature of the service, the marketing channel adopted by the company is direct channel. In the modern business environment, the marketing channel adopted by a product or service producer has an impact on the performance of the product in the market. Majority of products in the market go through marketing channels, where the producer involves partners commonly referred to as middlemen (Principles of Marketing, 2015). However, some products such as banking services do not have middlemen, and the marketing channel involves the producer and the consumer. This is due to the sensitivity of financial services as well as the nature of the industry. Wells Fargo treats client financial information as private and confidential. Involving a third party will impact negatively on the confidentiality. Additionally, due to the nature of the banking industry, there are no middlemen between the financial institutions and the client. Although Wells Fargo distributes its services through branches, the branches can not be considered to be intermediaries (Hall et al, 2004). Additionally, although mobile banking involves another service provide, the owner of the network, it does not involve middlemen.

  2. There are several factors that affect the intensity of distribution adopted by a service or product provider. Some producers prefer intensive distribution where they sell their product in a many outlets as possible. A product that uses intensive distribution is available in any outlet irrespective of location. A very good example is soft drinks. A producer can also opt for selective distribution where the product is sold in specific outlets within a specific location. This enables a producer to target different markets using different brand names. Another distribution strategy is exclusive distribution where a product is sold in one or a few outlets. This is mainly applicable where the producer markets the product directly to the consumer. This means that the producer distributes it products using its own stores or selected dealers (Principles of Marketing, 2015). Wells Fargo uses exclusive distribution in marketing its financial services. Wells Fargo customers can only get the services from one of the branches. This enables the company have full control of the quality of services offered to its clients. This protects the brand name and reputation of Wells Fargo financial services. Exclusive distribution at Wells Fargo is also dictated by the nature of the financial industry.

  3. The marketing channel has an influence on the marketability of a product. However, this is largely influenced by the type of product, the target market and the middlemen or parties involved in the channel. Some of the parties include dealers, wholesaler, retailers and distributors. The efficiency and effectiveness of a marketing channel is also influenced by the role played by the partners. In some products, the partners in the channel disseminate information about the product and thus promote the product and the brand. For example, the producer will convince the distributors and wholesalers to sell their product before advertising or promoting the product in the market. Other producers will create demand for a product through advertisements which will force wholesalers and distributors to sell the products. In both cases, the producer and marketing channel partners promote the product and the brand name. Partners can also sort and regroup the product which has an impact on marketability of the product. For example, retailers receive products in large packaging and breakdown into smaller units. Other important roles of the partners includes managing inventories, distribution of products, distributes the risk and share marketing information (Principles of Marketing, 2015). Since Wells Fargo sells directly to its customers, there are no partners in the marketing channel. However, the different branches perform all the functions of partners in convectional marketing channels. This includes dissemination of information, promotion of brand, distribution of services and sharing information.

  4. Pricing strategy has an impact on the marketability of a product or service. Wells Fargo operates in a very competitive market dominated to huge and relatively few players. Therefore price wars are not desirable. This is because pricing decisions are monitored closely by other players in the market. A change in prices may result into prices war which may negatively influence the operations of Wells Fargo and the industry in general. Additionally, the banking industry is highly regulated which has an impact on the pricing strategy (Principles of Marketing, 2015). As a result, the pricing strategies adopted by Wells Fargo are aimed at maximizing the market share. Although a large market share does not necessarily translate into higher profit, the strong brand recognition enables Wells Fargo to offer additional products to the customers. For example, by having a large market share, the bank to propose other financial services to the client. Due to customer loyalty and brand recognition, customers are more likely to consider other services offered by Wells Fargo (Wells Fargo, 2015).


Hall,J, R, et al. (2004). WellsFargo, strategic report,

Principlesof Marketing (2015).&nbspWashington,D.C.: The Saylor Foundation