Upload
cecilia-leonard
View
224
Download
4
Tags:
Embed Size (px)
Citation preview
13Marketing Channel
Professor Close
LO 1 Explain what a marketing channel is and why intermediaries are needed
LO 2 Define the types of channel intermediaries and describe their functions and activities
LO 3 Describe the channel structures for consumer and business products and discuss alternative channel arrangements
LO 4 Discuss the issues that influence channel strategy
Learning OutcomesLearning Outcomes
LO 5 Describe the different channel relationship types and their unique costs and benefits
LO 6 Explain channel leadership, conflict, and partnering
LO 7 Discuss channels and distribution decisions in global markets
LO 8 Identify the special problems and opportunities associated with distribution in service organizations
Learning OutcomesLearning Outcomes
Explain what a marketing channel is
and why intermediaries are needed
Marketing ChannelsMarketing Channels
Marketing Channels
a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer.
A Marketing Channel is…
Marketing Channel Functions
Specialization and division of labor Specialization and division of labor
Overcoming discrepancies Overcoming discrepancies
Providing contact efficiency Providing contact efficiency
LO1
Specialization and Division of Labor
Creates greater efficiency
Provides lower production costs
Achieves economies of scale
Aids producers who lack resources to market directly
Builds good relationships with customers
Overcoming Discrepancies
Discrepancyof
Quantity
Discrepancyof
Quantity
Discrepancyof
Assortment
Discrepancyof
Assortment
The difference between the amount of product produced and the amount an end user
wants to buy.
The difference between the amount of product produced and the amount an end user
wants to buy.
The lack of all the items a customer needs to receive full satisfaction from a product or
products.
The lack of all the items a customer needs to receive full satisfaction from a product or
products.
Overcoming Discrepancies
TemporalDiscrepancyTemporal
Discrepancy
SpatialDiscrepancy
SpatialDiscrepancy
A situation that occurs when a product is produced but a
customer is not ready to buy it.
A situation that occurs when a product is produced but a
customer is not ready to buy it.
The difference between the location of a producer and the
location of widely scattered markets.
The difference between the location of a producer and the
location of widely scattered markets.
Exhibit 13.1Exhibit 13.1How Marketing Channels Reduce the How Marketing Channels Reduce the Number of Required TransactionsNumber of Required Transactions
Define the types of channel intermediaries
and describe their functions and activities
Channel Intermediaries and Their Channel Intermediaries and Their FunctionsFunctions
Channel Intermediaries
RetailerRetailer A channel intermediary that sells mainly to customers.
A channel intermediary that sells mainly to customers.
MerchantWholesalerMerchant
Wholesaler
An institution that buys goods from manufacturers, takes title
to goods, stores them, and resells and ships them.
An institution that buys goods from manufacturers, takes title
to goods, stores them, and resells and ships them.
Agents andBrokers
Agents andBrokers
Wholesaling intermediaries who facilitate the sale of a product by representing channel members.
Wholesaling intermediaries who facilitate the sale of a product by representing channel members.
Channel Intermediaries
RetailersRetailers
Merchant WholesalersMerchant
Wholesalers
Agents and
Brokers
Agents and
Brokers
Take Title to GoodsTake Title to Goods
Take Title to GoodsTake Title to Goods
Do NOT Take Title to GoodsDo NOT Take Title to Goods
LO2
Factors Suggesting Type of Wholesaling Intermediary to Use
Product characteristicsProduct characteristics
Buyer considerationsBuyer considerations
Market characteristicsMarket characteristics
LO2
Factors Suggesting Type of Wholesaling Intermediary to Use
Factor Merchant Wholesalers
Agents/ Brokers
Nature of product Standard Nonstandard, custom
Complexity of product Simple Complex
Product’s gross margin High Low
Frequency of ordering Frequent Infrequent
Time between order and receipt of shipment
Shorter lead time
Longer lead time
Number of buyers Many Few
Concentration of buyers Dispersed Concentrated
Channel Functions Performed by Intermediaries
Contacting/Promotion
Negotiating
Risk Taking
Researching
Financing
Physically distributing
Storing
Sorting
FacilitatingFunctions
FacilitatingFunctions
TransactionalFunctions
TransactionalFunctions
Logistical Functions
Logistical Functions
Logistics
LogisticsThe efficient and cost-
effective forward and
reverse flow and storage of
goods, services, and related
information, into through,
and out of channel member
companies.
Channel Intermediaries and Functions
CHANNELINTERMEDIARIES
CHANNELINTERMEDIARIES
Retailers
Wholesalers
Agents and Brokers
Retailers
Wholesalers
Agents and Brokers
CHANNELFUNCTIONSCHANNEL
FUNCTIONS
Transactional
Logistical
Facilitating
Transactional
Logistical
Facilitating
Perform
Describe the channel structures for consumer and
business products and discuss
alternative channel arrangements
Channel StructuresChannel Structures
LO3
Exhibit 13.3Exhibit 13.3Marketing Channels for Consumer Marketing Channels for Consumer
ProductsProducts
Channels for Consumer Products
Direct Channel
Direct Channel A distribution channel in
which producers sell
directly to consumers.
© A
P P
hoto
/Matt
Slo
cum
Exhibit 13.4Exhibit 13.4Channels for Business Channels for Business and Industrial Productsand Industrial Products
Business-to-Business Exchanges on the Internet
Companies drop the intermediary from the supply chainCompanies drop the intermediary from the supply chain
“Private exchanges” with select suppliers automate the supply chain
“Private exchanges” with select suppliers automate the supply chain
The Internet has forced traditional distributors to expand their model.
Alternative Channel Arrangements
Multiple channels
Strategic channel alliances
Nontraditional channels
Discuss the issues that influence
channel strategy
Making Channel Making Channel Strategy DecisionsStrategy Decisions
Channel Strategy Decisions
Factors Factors Affecting Affecting Channel Channel ChoiceChoice
Factors Factors Affecting Affecting Channel Channel ChoiceChoice
Producer FactorsProducer Factors
Product FactorsProduct Factors
Market FactorsMarket Factors
Exclusive DistributionExclusive Distribution
Selective DistributionSelective Distribution
Intensive DistributionIntensive Distribution
Level ofLevel ofDistributionDistribution
IntensityIntensity
Level ofLevel ofDistributionDistribution
IntensityIntensity
Market Factors
Market Market FactorsFactorsThat Affect That Affect ChannelChannelChoicesChoices
Market Market FactorsFactorsThat Affect That Affect ChannelChannelChoicesChoices
Customer profilesCustomer profiles
Consumer or IndustrialCustomer
Consumer or IndustrialCustomer
Size of marketSize of market
Geographic location
Product Factors
Product Product FactorsFactorsThat Affect That Affect ChannelChannelChoicesChoices
Product Product FactorsFactorsThat Affect That Affect ChannelChannelChoicesChoices
Product Complexity Product Complexity
Product StandardizationProduct Standardization
Product Life CycleProduct Life Cycle
Product DelicacyProduct Delicacy
Product PriceProduct Price
Producer Factors
Producer Producer FactorsFactorsThat Affect That Affect ChannelChannelChoicesChoices
Producer Producer FactorsFactorsThat Affect That Affect ChannelChannelChoicesChoices
Producer Resources Producer Resources
Number of Product LinesNumber of Product Lines
Desire for Channel ControlDesire for Channel Control
Levels of Distribution Intensity
IntensiveIntensiveA form of distribution aimed at having a product available in every outlet
A form of distribution aimed at having a product available in every outlet
SelectiveSelectiveA form of distribution achievedby screening dealers to eliminate all but a few in any single area
A form of distribution achievedby screening dealers to eliminate all but a few in any single area
ExclusiveExclusiveA form of distribution that established one or a few dealers within a given area
A form of distribution that established one or a few dealers within a given area
Levels of Distribution Intensity
IntensiveAchieve mass marketselling. Convenience goods.
Many
Selective
Exclusive
Work with selected intermediaries. Shopping and some specialty goods.
Work with singleintermediary. Specialty goods and industrial equipment.
Several
One
Intensity Level Objective Number of
Intermediaries
Types of Channel Relationships
Describe the different channel relationship types and their unique
costs and benefits
Benefits Hazards
Arm’s Length Relationship
Fulfills a one time or unique need; low involvement/risk
Parties unable to develop relationship; low trust level
Cooperative Relationship
Formal contract without capital investment/long-term commitment; “happy medium”
Some parties may need more relationship definition
Integrated Relationship
Closely bonded relationship; explicitly defined relationships
High capital investment; any failure could affect every channel member
Types of Channel Relationships
Explain channel leadership, conflict,
and partnering
Managing Channel RelationshipsManaging Channel Relationships
Social Dimensions of Channels
PartneringPartnering
ConflictConflict
LeadershipLeadership
ControlControl
PowerPower
Channel Power, Control, and Leadership
ChannelPower
ChannelPower
A channel member’s capacity to control or influence the behavior of other channel members
A channel member’s capacity to control or influence the behavior of other channel members
ChannelControl
ChannelControl
A situation that occurs when one marketingchannel member intentionally affects another member’s behavior
A situation that occurs when one marketingchannel member intentionally affects another member’s behavior
Channel Leader
Channel Leader
A member of a marketing channel that exercises authority/power over the activities of other members
A member of a marketing channel that exercises authority/power over the activities of other members
Channel Conflict
ChannelConflict
ChannelConflict
A clash of goals and methods
between distribution channel
members
A clash of goals and methods
between distribution channel
members
Channel Conflict
Conflicts may occur if channel members:
Have conflicting goals
Fail to fulfill expectations of other channel members
Have ideological differences
Have different perceptions of reality
Channel Partnering
By COOPERATING, channel members can speed up inventory replenishment, improve customer service, and reduce the total costs of the marketing channel.
the joint effort of all channel members to create a channel that serves customers and creates a competitive advantage.
Channel Partnering (Channel Cooperation) is…
Discuss channels and
distribution decisions
in global markets
Channels and Distribution Channels and Distribution Decisions for Global Markets Decisions for Global Markets
Channels and Distribution Decisions for Global Markets
Global Channel Development
Global Channel Development
Channel structure and type differ
Channel structure and type differ
Gray marketing channelsGray marketing channels
Distribute directly or through foreign partners
Identify the special problems and
opportunities associated with distribution in
service organizations
Channels and Distribution Channels and Distribution Decisions for ServicesDecisions for Services
Distribution in Service Organizations
Beyo
nd
th
e
BookChapter 13 Videos
Sephora – Marketing Channels
Discuss Sephora’s marketing channel for consumer products.
http://www.cengage.com/marketing/book_content/1439039429_lamb/company_clips/ch13.html