the intermediary and the final customer is termed the client. It
should be noted that terminology used on a day-to-day basis within
a given industry sector may also vary from one firm to another.
Many organizations adopt multiple channels in seeking to serve
the final consumer, whilst others use only one channel. For example,
some insurance companies, such as Direct Line, market directly to
the final consumer. Other insurance companies sell both through the
traditional broker channel as well as selling direct. For example,
Guardian Royal Insurance, a large UK composite insurer, markets
indirectly to final consumers through a large network of insurance
brokers. However, it also has a separate division, Guardian Direct,
which markets directly to final consumers.
There are a wide range of distribution options by which a
company may seek to serve the final consumer. Some of these are
shown in Figure 2.2. The choice regarding distribution options
should be made following a determination of the value proposition
relevant to the final consumers in the desired segments that a
company wishes to serve. The distribution options should also be
put under regular scrutiny as circumstances change and new oppor-
tunities present themselves. There is now an increasing recognition
that for a firm to be successful it needs to create a supply chain that
is more effective than that of its competitors. Therefore it is supply
chains or market networks that compete, rather than just compa-
nies. Thus the task that needs to be addressed is how to create a
superior value delivery network.^2
36 Relationship Marketing
Intermediary
(e.g. broker)Intermediary
(e.g. distributor)Intermediary
(e.g. retailer)Intermediary
(e.g. retailer)Buyer
(e.g. wholesaler)Buyer
(e.g. wholesaler)Supplier
Consumer
Figure 2.2 Alternative channel options in the value delivery network.