Marketing Channel Mkt750
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Transcript of Marketing Channel Mkt750
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MKT 750 Individual PresentationMarketing Channel
Ahmad Aman Bin Mohd Saifuddin (2013985225)
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WHAT IS MARKETING
CHANNEL ?
TITLE SEPARATOR
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1.0 Marketing Channel
A Marketing Channel is a set of interdependent
organizations involved in the processof making a product or
service available for use or consumption
OR
Marketing Channel is a set of interdependent organizationsthat ease the transfer of ownership as products moves from
producer to business user or consumer
Also known as Distribution Channels
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Objectives Of The Marketing Channels
To ensure the availability of the product at the point of
sale
To build the channel member loyalty.
To stimulate channel members to put greater selling
efforts.
To developed managerial efficiency in the channel
organization.
To identify your organization at buyer level.
To have an effective and efficient distribution system ,
to make your product and services available.
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TheImportance Of The Marketing Channels
Time and place utility
Convenience to customer
Information to the producer
Stability in prices.
Promotional Activities.
Storage of finished goods(additional).
Finance the producer.
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Marketing channel strategy growing inimportance. WHY???
Search for sustainable competitive advantage.
Growing power of retailers in marketingchannel.
Need to decrease the cost of distribution.
Increased role and power of Technology.
New stress on growth.
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FunctionsOf Marketing Channels
InformationProvider
PriceStability
Promotion
Financing Titleexchanges
MatchingDemandAnd Supply
Matching
Buyer andSeller
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Types of Marketing Channels
Method of selling directly toend user from themanufacturer with nointermediaries
DirectChannels
Involves a products passingthrough intermediaries inorder to be made available for
purchase by a customer
Indirect
Channels
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Companies Using Direct MarketingChannels
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Companies Using IndirectMarketing Channels
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Consumer And BusinessChannel
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Five Marketing Flows In the Marketing Channel
Example : Forkl i f t Trucks
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CHANNEL STRATEGIES
IntensiveDistributions
SelectiveDistr ibut ions
Exclusive
Dist r ibut ions
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CHANNEL STRATEGIESIntensive Distributions
Where manufacturers distributes hisproducts through as many distributors aspossible.
It is used for the products that ischaracterized as low involvement of thecustomer and where customer looks forconvenience location.
Products like chocolates, soap, shavingblades and detergents are distributed thisway.
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CHANNEL STRATEGIESSelective Distributions
Where manufacturers distributes his productsthrough selected outlets.
It is appropriate for consumer shopping goods suchas various type of clothing and appliances and
business accessories equipments.
Usually the manufacturer move to selectivedistributions tohinges from high cost of intensive distributionunsatisfactory performance of middlemenEnhance image of the productsStrengthen customer servicesImprove quality controlMaintain influence on prices
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CHANNEL STRATEGIESExclusive Distributions
Where manufacturers distributes his productsthrough relative fewer number of major outlets whoexclusively deal with it and not all competing brand.
This is common for product who seeks high
prestigious image.
It is commonly used for designer ware, majordomestic appliances, and even automobiles.
By granting exclusive rights the manufacturer hopesto have control over the intermediaries price,promotion, credit inventories and services policy.
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CHANNEL STRATEGIESSummary
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Designing a Channels Systems
Formulating Channel Objectives
Identifying channel functions
Linking design to product characteristics
Evaluation of distributions environment
Evaluation of competitors channel design
Matching channel design to company resources
Evaluating alternatives and selecting the best
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Bases of Power in Marketing Channels
Reward Power
Coercive Power
Legitimate Power
Referent Power
Expert Power
Effective Channel Management Depends On How Well
These Power Bases Are Combined and Used
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HOW
MARKETING
CHANNEL
INFLUENCES
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HOW MARKETING CHANNEL INFLUENCES - Segmentation
Channel Segmentation is about defining and
segmenting a retail channel, with implications for
Point of Purchase strategy and activation.
Understanding and segmenting your channels can
minimise wastage, increase your product sales via
relevance, deepen your relationship with retailers and
set realistic expectations for product launches and
sales performance given your understanding of the
channel and its role
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HOW MARKETING CHANNEL INFLUENCES - Segmentation
Channel Segmentation influences organizationsapplications on the following:-
1. Distributions and ranging strategy
2. Space and layout strategy
3. Visibility, merchandising display
4. Pricing and price promotion
5. Retailer, staff education & incentives
6. Measurement &evaluations tools for channel
segments.
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HOW MARKETING CHANNEL INFLUENCES - Communication
Communication can be described as gluethat holds together a channel ofdistributions.
It helps organizations to developed anddisseminates communications to stimulatepurchasing.
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Push & Pull Strategy
push strategy directs communication efforts at channel
members many products, such as business products, are
promoted with a push strategy, involving
personal selling and use of trade promotions pull strategy
directs promotion at the end consumer most consumer products would rely more
heavily on a pull strategy where promotion is directed at the consumer to
stimulate demand
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Producer Wholesaler Retailer Consumer
PUSH STRATEGY
Producer Wholesaler Retailer Consumer
Product flow Communication effort
PULL STRATEGY
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HOW MARKETING CHANNEL INFLUENCES - Communication
In order to have an effectivecommunication in channel members theorganizations have to manages/clarify
Objectives between manufacturer andretailer
The differences in languages
Participation in decision making process
that involve directly to their businesses. Adequacy of information
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HOW MARKETING CHANNEL INFLUENCES - Pricing
Channel members conduct pricenegotiations with buyers and assists inarriving at the right price (the price that isacceptable for user and manufacturer.
Pricing in Channel Management involves
Cost
Market
Competition Channels
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HOW MARKETING CHANNEL INFLUENCES - Offering
The marketing channel help in identifying the best strategy todistribute his product which reflect the nature of product asexplain in table below :-
NO TYPES OFPRODUCT
NATURE OF
PRODUCTCHANNEL
STRATEGYEXAMPLE OF
PRODUCTS
1. Convenience Willing to invest invery limited
shopping efforts
IntensiveDistribution
Food,cleaningproducts&personal
care
2. Shopping Consumer iswilling in a great
deal of time and
effort
Selective
DistributionClothing & Personal
services
3. Specialty Goods are thosethat are of interest
only to a narrow
segments of the
population
Exclusive
DistributionHigh end luxury
automobiles
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ProductComparisonadvertising
ProductBenefits
advertising
ProductFamily
advertising
Corporateadvertising
Other Offering Strategy
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References
Cullen, Kathleen and Caryl Helsel, Defining Revenue
Management, Top Line to Bottom Line, HSMAI Foundation,
Bethesda, MD, 2006
Sagar Gadekar, MIT Pune's Maharashtra Academy of
Engineering, Alandi, Pune MD, 2012.
Faculty leebow.drexel.edu/RoselbloomB/Channel
Shodhganga.inflibnet.ac.in/bitstream
www.knowthis.com/product-decisions
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Conclusions
Distributions is the most important variable inmarketing plans of most consumer andbusiness goods manufactures, becausemanaging such a massive sales and
distribution network is in itself a huge task
Understanding the nature of MarketingChannel can help avoids/manages the conflicttherein and perhaps ensure the effectivenessof product availability in the market
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Other Offering Strategy
In a market where your offering is one of several providingsimilar capabilities, if your offering stacks up well whencomparing features then a product comparison ad can bebeneficial.
Product Benefits advertisingWhen you want to promote your offering without comparison tocompetitors, the product benefits ad is the correct approach.This is especially beneficial when you have introduced a newapproach to solving a user need and comparison to the oldapproaches is inappropriate.
Product Family advertisingIf your offering is part of a group or family of offerings that canbe of benefit to the customer as a set, then the product familyad can be of benefit.
Corporate advertisingWhen you have a variety of offerings and your audience is fairlybroad, it is often beneficial to promote your enterprise identityrather than a specific offering