Upload
arupdey1986
View
859
Download
0
Embed Size (px)
Citation preview
Channel Participants in B2B and Physical
distribution system
Group-9
Flow of the presentation…
I. Difference of b2b from b2c with ref. to
intermediaries and the role of internet in
b2b selling and distribution.
II. Channel conflicts and its management.
III. The role of physical distribution and its
efficient use to better channel
management
The general intermediaries
Wholesellers Brokers Retailers Agents
Buy products from the manufacturer andresell them to retailers
Buy productsfrom wholesalers and sell them to consumers.
Facilitate transactions between buyers andsellers without representing either party
Represent the buyer/seller and facilitatetransactions between buyers and sellers but do nottake title to the goods.
The current b2b scenario
Diminishing role of the intermediaries and evolution of 4
different types of exchanges between buyers and
sellers(Kaplan & Sawhney).
• MRO hubs-links buyers & sellers electronically(low value
high transaction cost, operating inputs)
• Yield managers- exchanges allowing comps. To add
capacity and rapidly meet demand application in
industries with fluctuating demand.(spot peocurement
of operating inputs)
• Online exchanges-smooth supply and demand curve
and proper buyer seller relationship.
• Catalog hubs-similar to MROs but are industry specific.
Source-The effect of the Internet in industrial channels: an industry example. Authors, William Lightfoot, James R. Harris
Diagrammatic representation
B2B E commerce hubs: Towards a taxonomic model by Steven Kaplan and Mohanbir Sawhney
The alternative effect of internet on the b2b exchange
Barriers to entry-
Buyer power-
• eliminates powerful channels, improves bargaining power of traditional channels.
• shifts bargaining power to end users. • reduces switching costs.
Supplier power-
• Internet provides channel for suppliers to reach end users; • Internet provides equal access to all companies.
Threat of substitutes-
• Internet approaches create new substitution threats.
Competitive rivalry:
• migrates competition to price;
• widens geographic market
Conflicts in the channel and its management in the
age of e-commerce
Causes for channel conflict-
• Goal incompatibility.
• Domain dessensus.
• Differing perceptions of reality.
Source- maintaining channel of distribution in the age of E-commerce by Kelvin L Webb
Conflict management strategies
with reference to pricing
Proposition1- Supplier firms will experience lowerlevels of channel conflict by not pricing products on their website below the resale price of their channel partners.
with reference to distribution
Proposition 2- Supplier firms will experience lowerlevels of channel conflict by diverting fulfilment oforders placed on their website to their channel partners.
with reference to promotion
• Proposition 3- Supplier firms will experience lower levels of channel conflict by providing product information on their website without taking orders.
• Proposition 4- Supplier firms will experience lower levels of channel conflict by promoting their channel partners on their website.
• Proposition 5- Supplier firms will experience lower levels of channel conflict by encouraging their channel partners to advertise on their website.
with reference to product-
Proposition 6-Supplier firms will experience lower levels of channel conflict by limiting the offering on their website to a subset of their products.
Proposition 7-Supplier firms will experience lowerlevels of channel conflict by using a unique brand namefor products offered on their website.
Proposition 8- Supplier firms will experience lowerlevels of channel conflict the earlier the products offeredon their website are in the demand lifecycle.
with reference to communication and coordinating-
Proposition 9- Supplier firms will experience lowerlevels of internal (external) channel conflict the moreeffectively they communicate their overall distributionstrategy internally (externally).
Proposition 10- Supplier firms will experience lowerlevels of internal (external) channel conflict the moreeffectively they coordinate their overall distributionstrategy internally (externally).
Proposition 11- Supplier firms will experience greaterchannel coordination internally (externally) the moreeffectively they communicate their overall distributionstrategy internally (externally).
Proposition12-Supplier firms will experience lowerlevels of internal (external) channel conflict the more theymake use of super ordinate goals internally (externally).
Multiple channel distribution andVMS( vertical
marketing system)
Multiple channel distribution-
• Includes usage of several channels.
• Reach out to larger no of buyers.
• New market segments.
• Can cause friction in the distribution channel.
VMS-coordinated and integrated channel.
Types- Corporate.
Administered.
Contractual.
Partnering-Some manufacturers are linking their computers with their retailers (e.g., Procter and Gamble is doing this with Wal Mart and K-Mart). The manufacturer then has the ability to observe when inventories are low for a particular product and make recommendations that the retailer restock.
Film distribution-
• Large no of films are produced.• Direct and immediate distribution of the films to the viewers.
Physical distribution- the only variable cannot be
accomplished by the internet.
Interfaces
between physical
distribution
strategy and
channel
management in
sequence.
Source- using physical distribution strategy for better channel management- Bert rosenbloomDrexel university
Defining the PD standard-
Heskett et al lists 9 important service standards-
To accomplish the Hesket et al standards it is
necessary to-
• Investigate the views of channel members to identify the actual need.
• Conduct a survey research(Hutchinson and Stolle) regarding various services the channel member want- useful for competitive advantage.
• Perreult and Russ- provide alternative programs and then sketch out the feasible options and trade offs.
Evaluation of the PD system-
The PD must meet the requirement(wants) of
the channel members within tolerable cost
constraints.
If a PD fails then an alternative must be
employed focusing on customer and/or
channel partner needs.
Selling the PD system-
Minimizing out of stock occurrences-• Will help the channel member not to lose sales.
• Non genuine promises may lead to conflicts.
Reduction of inventory-• Short inventory cycle
• Lower holding cost
Strengthening the relationship-• Can serve as a tangible sign of the manufacturers concern
toward partners.
• Should be presented taking the interest of the partners.
moniMonitoring the PD system-
• The system must be continually monitored to
evaluate the members responses.
• To find out the need of modifications.
• Can be done with as a part of marketing
channel audit.
THANKS FOR YOUR ATTENTION
ARUP DEY KHUSBOO AGRAWAL DIPIKA KHANDELWAL