Explain how channel systems build customer value

What will be an ideal response?

A channel system can enhance customer value by either increasing customer benefits or lowering customer cost of purchase, or both.
The primary ways of increasing customer benefits are:
(1 ) Delivering Product Benefits: In selecting a particular channel system, a business needs to consider how that channel system either enhances or detracts from the product benefits of product quality (i.e., Can the channel system deliver the product or service with the quality level required and expected by target customers?), product assortment (i.e., Can the channel system provide the range of products required in order to achieve a desired level of customer appeal?), and product form (i.e., Can the channel system provide the product, as it is needed, to both intermediaries and final customers?).
(2 ) Delivering Service Benefits: To determine if a channel system is viable, a business has to consider after-sale services (i.e., What are the after-sale services that are critical to achieving total customer satisfaction with the product or service?), availability/delivery (i.e., To what degree do customers benefit from quick access to goods or services and immediate delivery?), and transaction services (i.e., Can the channel system provide for the customer's credit needs, terms of payment, warranty, and return of faulty products?).
(3 ) Building Brand Image: It is important to carefully consider how a channel system will affect the image of a product or manufacturer.
(4 ) Building Company Benefits: Overall benefits can be enhanced and contribute to building customer value with relationship marketing. Strong customer-firm relationships produce high degrees of commitment by both parties, and high commitment has the potential to enhance customer value.
(5 ) Improve Cost Efficiency: By making a product readily available, a business can lower customers' transaction costs. Customers have preferred points of purchase. If a business does not make products readily available to these points of purchase, it inherently raises the cost of the transaction. For undifferentiated products, this type of transaction cost is high because customers will not make the effort to purchase the product if it is not conveniently available. Another way to affect customer value is to lower the cost of reaching customers by developing channel systems that are cost-efficient while still delivering the benefits sought by customers.