Mohit Sewak

Understanding the Relationships Among

Brands, Consumers, and Resellers

The article “Understanding the Relationships Among Brands, Consumers, and Resellers“, by Frederick E. Webster, Jr., says that the retailers keep some of this surplus for themselves and pass some onto their end user customers. In sum, retailers and consumers gain, while national brand manufacturers lose as large retailers gain more power and control in the marketing channel. At the same time, it is clear that the consumer’s value equation has more variables in it than price. Lowest price is not the only definition of value for most consumer segments.

There is often an implicit assumption that the brand is strictly a relationship of the manufacturer with consumers that competes with the retailer’s relationship with the consumer for consumer loyalty. Lost in the argument is any consideration of the value of the manufacturer’s brand to retailers in building their relationships with customers. For the past 100 years, manufacturer “pull” (mass communication) replaced reseller “push” (personal selling) as the main influence on the consumer. National brand marketers focused on the consumer as their customer, not the retailer’s customer. It is common to refer to “trade leverage” as a major benefit of branding to the manufacturer, a source of power over resellers.

Today, there is growing evidence that many major packaged-goods manufacturers have changed their thinking to define their customer as the reseller, not the end user/consumer. They therefore adopt the point of view of a business-to-business marketer as well as a consumer marketer. They must focus on enhancing the profitability of their  customer–the retailer, as opposed to thinking of products more narrowly in terms of the value they offer to end users. It must be recognized that both the manufacturer (brand) and the reseller deliver value to the consumer, and consumer buying motivations involve both sources of value.

There is a fundamental problem of integrating the elements of push and pull into the brand marketing strategy; relationships with the consumer and with the trade must be managed in an integrated framework. Pricing issues are a central element of this problem, as consumers, retailers, and manufacturers compete for their share of the value being created by the brand. Traditional theoretical approaches to the study of marketing channels have tended to focus on conflict, rather than cooperation. The traditional definition of a brand as a guarantee of consistent features, quality, and performance to consumers largely ignores its function as a pledge of support to retailers.

Push strategies require higher margins for retailers to support their selling efforts, while pull strategies require higher margins for the manufacturer to support advertising and other mass communications. In point of fact, of course, virtually all marketing strategies are blends of push and pull elements, and the test of marketing management knowledge and skill is to get the balance right given the unique requirements of specific markets. Traditional ways of thinking about branding have largely left the reseller out of the equation. First and foremost, the manufacturer must realize that its customer is the reseller, not the consumer. Fundamentally, the value of the brand to the reseller must be related directly to the value of the brand to the consumer, not just price and promotion.

Please Share this article With Your Friends and Family On: