Page 97 -

|96 PART 2 Understanding the Marketplace and Customer Value
Marketing intermediaries
Firms that help the company to promote,
sell, and distribute its goods to final Marketing intermediaries help the company promote, sell, and distribute its products
buyers.
Partnering with intermediaries: Coca-Cola provides its retail Coca-Cola assigns cross-functional teams dedicated to under-
partners with much more than just soft drinks. It also pledges
powerful marketing support.
Bloomberg via Getty Images
everything from polymers and fats to spray cans and packaging to production equip-
ment and office supplies:2
L’Oréal is the world’s largest cosmetics maker, with 34 global brands ranging from Maybelline
and Kiehl’s to Lancôme and The Body Shop. The company’s supplier network is crucial to its
success. As a result, L’Oréal treats suppliers as respected partners. On the one hand, it expects a
lot from suppliers in terms of design innovation, quality, and sustainability. On the other hand,
L’Oréal works closely with suppliers to help them meet its exacting standards. According to the
company’s supplier Web site, L’Oréal treats suppliers with “fundamental respect for their busi-
ness, their culture, their growth, and the individuals who work there.” Each relationship is based
on “dialogue and joint efforts. L’Oréal seeks not only to help its suppliers meet its expectations
but also to contribute to their growth, through opportunities for innovation and competitive-
ness.” As a result, more than 75 percent of L’Oréal’s supplier partners have been working with the
company for 10 years or more, and the majority of them for several decades. Says the company’s
head of purchasing, “The CEO wants to make L’Oréal a top performer and one of the world’s
most respected companies. Being respected also means being respected by our suppliers.”
Marketing Intermediaries
to final buyers. They include resellers, physical distribution firms, marketing services
agencies, and financial intermediaries. Resellers are distribution channel firms that help the
company find customers or make sales to them. These include wholesalers and retailers
that buy and resell merchandise. Selecting and partnering with resellers is not easy. No
longer do manufacturers have many small, independent resellers from which to choose.
They now face large and growing reseller organizations, such as Walmart, Target, Home
Depot, Costco, and Best Buy. These organizations frequently have enough power to dictate
terms or even shut smaller manufacturers out of large markets.
Physical distribution firms help the company stock and move goods from their points
of origin to their destinations. Marketing services agencies are the marketing research firms,
advertising agencies, media firms, and marketing consulting firms that help the company
target and promote its products to the right markets. Financial intermediaries include banks,
credit companies, insurance companies, and other businesses that help finance transactions
or insure against the risks associated with the buying and selling of goods.
Like suppliers, marketing intermediaries form an important component of the
company’s overall value delivery network. In its quest to create satisfying customer
relationships, the company must do more than just optimize its own performance. It
must partner effectively with marketing intermediaries to optimize the performance
of the entire system.
Thus, today’s marketers recognize the importance of working with their intermedi-
aries as partners rather than simply as channels through which they sell their products.
For example, when Coca-Cola signs on as the exclusive beverage provider for a fast-food
chain, such as McDonald’s, Wendy’s, or Subway, it provides
much more than just soft drinks. It also pledges powerful
marketing support:3
standing the finer points of each retail partner’s business. It
conducts a staggering amount of research on beverage con-
sumers and shares these insights with its partners. It analyzes
the demographics of U.S. zip code areas and helps partners
determine which Coke brands are preferred in their areas.
Coca-Cola has even studied the design of drive-through menu
boards to better understand which layouts, fonts, letter sizes,
colors, and visuals induce consumers to order more food and
drink. Based on such insights, the Coca-Cola Food Service
group develops marketing programs and merchandising tools
that help its retail partners improve their beverage sales and
profits. Its Web site, www.CokeSolutions.com, provides retailers
with a wealth of information, business solutions, merchandis-
ing tips, and techniques on how to go green. We’re “working
together to make your business better,” says Coca-Cola to its
retail partners. Such intense partnering has made Coca-Cola a
runaway leader in the U.S. fountain-soft-drink market.