Marketing Channels 8th Edition by Bert Rosenbloom

Question

Marketing Channels 8th Edition by Bert Rosenbloom

Edition 8ISBN: 978-0324316988

Marketing Channels 8th Edition by Bert Rosenbloom

Edition 8ISBN: 978-0324316988

Exercise 2

The TV reporter for a network news show is walking through a cornfield with a downtroddenlooking farmer in Iowa. As they continue through the field, the farmer comments: "My family and I have worked real hard over the years to produce a good crop, but we hardly get much of a price for it. But when I see how much they want for corn and just about any corn products in the supermarkets, I can't believe it. The consumer is paying a high price while I'm getting a very low price, so somebody must be making a lot of money in between." The reporter then turns to the camera and in a melodramatic style intones: "As you've just seen, we've talked with a farmer who, in spite of all his hard work, can hardly make a living. But you and I both know how high prices are in the supermarkets. Are we being ripped off by a bunch of middlemen?"
Comment on the farmer's lament to the reporter and the reporter's remarks to the TV audience in light of the relevant channel concepts discussed in this chapter.

Explanation

Verified

It is true that the farmer who produces corns or any other farm products gets a fraction price as his product is sold at the super market at a hefty price and he does not gets its benefit. This is because of the multiple agents involved in its buying and also a number of channels involved in the process. This happens right from facilitators as well as agents and other wholesalers who procure corn from the farmer, transport it to the company who creates its own brand name, advertise it, packs it and then again directly supplies it to the super store who then sells it directly to its consumers. When the farmer sells the product like corn it is a commodity and when the company sells it, it becomes a brand. Since the company invests a lot of money in building the brand they try to gain profits by creating demand of their products in the market. They also manage the variables of the marketing mix and derive benefits through adopting better marketing strategies.