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10. Distribution Strategy

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Building Direct Customer RelationshipExample: Dell’s Direct Model

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Outline

The functions of distribution channelsThe Optimal Channel DesignVertical Marketing SystemsThe Multi-Channel SystemChannel Conflicts

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Establish channels for different target markets and aim for efficiency, control, and adaptability.

Kotler on Marketing Channels

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What is a Value Network and Marketing-Channel System?

• Value Network• Marketing channel

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行 銷 通 路

• A distribution channel creates value by generating form, possession, time and place utilities.

• 為何需要使用中間商?– Increase efficiency– Sorting – Facilitate the searching process

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How a Distributor Reduces theNumber of Channel Transactions

= Customer= Manufacturer

A. Number of contacts without a distributor

M x C = 3 X 3 = 9

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How a Distributor Reduces theNumber of Channel Transactions

= Distributor= Customer= Manufacturer

B. Number of contacts with a distributorM x C = 3 + 3 = 6

Store

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Consumer Marketing ChannelsConsumer Marketing Channels

WholesalerWholesaler JobberJobber RetailerRetailer ConsumerConsumer

ConsumerConsumer

RetailerRetailer ConsumerConsumer

ManufacturerManufacturer0-level channel

WholesalerWholesaler RetailerRetailer ConsumerConsumer MfgMfg2-level channel

MfgMfg

3-level channel

1-level channelManufacturerManufacturer

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通路規劃的目標

Providing service outputs demanded by relevant target markets

Bucklin specifies service outputs: Spatial convenience Lot Size Assortment/Variety Delivery Time Service Backup

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行銷通路的功能

InformationPhysical PossessionOwnershipPromotionNegotiationFinancingRisking

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Common Features for Channel Functions

It usually needs resources to perform them.They can be performed better through specialization.They can not be eliminated.They can only be shifted through M, R and customers.

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通路結構

通路長度 : 直接 vs. 間接

Tradeoff between coordination and efficiency

Transaction cost theory 通路寬度 (Market coverage)密集式配銷 (便利品)

獨家式配銷 (特殊品)

選擇式配銷 (選購品)

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Figure 15.4 The Value-Adds vs. Costs of Different Channels

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Evaluating the major channel alternatives

Economic criteriaControl criteriaAdaptive criteria

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Sellingcosts

(dollars)

Level of sales (dollars)

Break-Even Cost Chart

Companysales force

Manufacturer’s sales agency

SB

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Corporate Administered

Contractual

Cooperation Complete Good Fairly goodControl Ownership Economic

powerContracts

Example Sears P&G McDonald‘s

Vertical Marketing System

整合式 VMS管理式 VMS契約式 VMS

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整合式 VMS

整合式 VMS

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Conventional Distribution Channel vs. Vertical Marketing Systems

Verticalmarketingchannel

Manufacturer

Retailer

Conventionalmarketingchannel

Consumer

Manufacturer

Consumer

Retailer

Wholesaler

Who

lesa

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Two or more companies at one level join together to follow a new marketing opportunity.

Horizontal Marketing Systems

Nestle and General Mills work together to market cereal outside of North America

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Horizontal Marketing Systems

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多重行銷通路系統

Benefits Increased market coverage Lower channel cost More customized selling

Costs Channel conflict and control problems

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Disintermediation

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通路衝突

水平式衝突

Free-riding across dealers Special Services Quality Certification by Stores垂直式衝突

Double-marginalizationFree-riding across manufacturers

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Vertical Channel Conflict

Shan-Yu Chou 26Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-26

Causes of Channel Conflict

Goal incompatibility

Unclear roles and rights

Differences in perception

Intermediaries’ dependence on the manufacturer

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Strategies for Multi-Channel Conflicts

New customersDifferent brands, products, or servicesCompensation schemesComplementary relationship

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垂直契約限制

Franchise FeeExclusive DealingExclusive TerritoryResale Price Maintenance (RPM)Slotting AllowanceTying Contract

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通路動態

Introduction Typically through specialty channels

Growth Higher volume channels appear

Maturity Moving to lower cost outlets

Decline Even lower cost channels emerge.

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Figure 17.6: Channel Value Added and Market Growth Rate

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Example:Dell Computer Corporation

• Innovative Concept– Custom Design– Direct Sales

• Virtual Integration

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Example: Comcast vs. Netflix

Comcast is the distribution channel for competitors such as Netflix.Cable companies such as Comcast limit the amount of data their Internet service subscribers can download.Comcast has its own online video-streaming app called Xfinity, by which subscribers can stream programming using Xbox game consoles. 32

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Marketing TechnologyOmnichannels

Macy’s is turning 300 of its 800-plus stores into combination retail outlets and online warehouses to combat competitors such as Amazon.com.

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Marketing Technology: Tracking Customers

shopper marketing and Wi-Fi technology

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