Chanus - Channel Mgnt System

7/28/2019 Chanus - Channel Mgnt System

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Designing and Managing ValueNetworks and Channels


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Marketing Channels

Sets of interdependent organizationsinvolved in the process of making aproduct or service available for use

or consumption.


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Channels andMarketing Decisions

PushStrategy

Sales force Trade promotions Low brand loyalty Impulse products

Pull

Strategy Advertising(or) promotions Persuade consumersto demand the product

High brand loyalty


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Buyer Expectations for Channel Integration Ability to order a product

online and pick it up at aconvenient retail

location Ability to return an

online-ordered productto a nearby store

Right to receivediscounts based on totalonline and offline

purchases


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Value Network & Role of marketing channels Is a system of

partnerships andalliances that a firm

creates to source,augment and deliver itsofferings.

Moving goods fromproducers toconsumers

Forward flow Backward flow Horizontal flow


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Increasing Efficiency


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Channel Member Functions

Gather information Develop and disseminate persuasive

communications

Reach agreements on price and terms Acquire funds to finance inventories Assume risks

Provide for storage Provide for buyers payment of their bills Oversee actual transfer of ownership


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Suppliers TransportersWarehouses

Manufacturers Transporter s,warehouses

Transporter sDealers

Customer s

1. Physical Flow

Suppliers Manufacturers Dealers Customers

2. Title Flow

CustomersBanksDealersTransporters,Warehouses,

BanksManufacturersBanksSuppliers

3. Payment flow

Fig. 15.2 Five Marketing Tools for the Marketing Channel of Forklift Trucks


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Internet Makes DirectDistribution Easier

Internet Makes DirectDistribution Easier

Greater Control

Lower Cost

Direct Contact withCustomer Needs

Quicker Response or Change in Marketing Mix

Greater Control

Lower Cost

Direct Contact withCustomer Needs

Quicker Response or Change in Marketing Mix

Suitable MiddlemenNot Available

Channel System May Be Direct or Indirect

SomeReasonsFor ChoosingDirect Channels


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Consumer Marketing Channels


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Industrial Marketing Channels


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Channel Systems Can Be Complex


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Channel Objective Channel institutions should

arrange their functional tasks

to minimize total channelcosts and still provide

desired levels of serviceoutputs


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Intensive

Selective

Intensive

Selective

The Best Channel System Should Achieve IdealMarket Exposure

= number ofoutletsExclusive

MarketExposureStrategies


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Break-Even Chart for the Choice Between ACompany Sales Force and ManufacturersSales Agency


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Channel Power

Coercive Withdraw or terminate

relationship

Reward Extra benefit for performing

specific acts or functions

Legitimate Contract requirements

Expert Special knowledge

Referent Highly respected


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Vertical Marketing Systems Focus on Final Customers

Fairly goodto good

Contracts

McDonalds

Complete

Onecompany

ownership

Florsheim

Some togood

Economicpower andleadership

GeneralElectric

Characteristics

Type of channel

Little or none

None

Typicalinde -

pendents

Amount of cooperation

TraditionalVertical marketing systems

Administered Contractual Corporate

Control maintained

by

Examples


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Retailer Retailer Retailer

Horizontal Arrangements Are Illegal

Limiting Market Exposure

Retailer Retailer

Producer

Vertical ArrangementsMay Be Legal Wholesaler


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Managing Channel Conflict

Adoption of superordinate goals (joint effort to achieve goal)

Cooptation (include leaders of another

organization on advisory

councils, boards of directors) Diplomacy (person or group to meet to

resolve conflict) Mediation

(neutral third party conciliatetwo parties interests)

Arbitration (arbitrator makes the decision)


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Producers or Middlemen May Be Channel Captains


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e-Commerce Marketing Practices

Pure-click (launched a website

without any previousexistence as a firm

Amazon, ebay) Brick-and-click

(existing companies thathave added an onlinesite for information &/or e-commerce Compaq,Barnes & Noble)

Brick-and-mortar
http://www.chefswarehouse.com/

Chanus - Channel Mgnt System

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