Final answer:
Option (a), Channel members add value to a product by performing channel activities expertly, contributing to distribution efficiency, accessibility, and customer convenience, which are aspects of product differentiation.
Step-by-step explanation:
Channel members add value to a product by performing certain channel activities expertly. They are integral to the distribution process and contribute to product availability and customer convenience by ensuring that the product is available in locations where customers expect to find it, and by providing additional services such as installation, customer support, or financing. In this way, they perform the crucial functions of bridging the gap between the producer of the goods and the final consumer.
This process of making a product more appealing and accessible to consumers without necessarily increasing the cost is part of what's known as product differentiation, a key strategy in monopolistic competition and an essential aspect of marketing that can lead to increased demand for a company's products.
Product differentiation is any action that firms do to make consumers believe their products are different from their competitors', which can include not only channel member activities but also advertising and marketing efforts to create a recognizable brand name. A successful advertising campaign may allow a firm to sell either a greater quantity or to charge a higher price.