Chapter Eleven Place Chapter Eleven Learning Objectives To
Chapter Eleven Place
Chapter Eleven Learning Objectives • To classify online distribution activities and learn how they are influenced by the Internet environment • To identify online place issues that concern Internet marketers • To characterize successful online consumer channel strategies and understand reasons for their success Copyright © Houghton Mifflin Company. All rights reserved.
Place Fundamentals Figure 11 -1: Marketing Channels Copyright © Houghton Mifflin Company. All rights reserved.
Place Fundamentals (cont’d) • Supply channels • Deliver upstream value – Provide direct and indirect products • Traditional ways of doing business have worked against emarketplaces – Private emarkets are more widely accepted – Horizontal and vertical exchanges • Supply channels often led by powerful manufacturers or retailers Copyright © Houghton Mifflin Company. All rights reserved.
Place Fundamentals (cont’d) • Eprocurement is saving money • Large corporations dragging their suppliers online • Web-based supply systems also important • More internet business expansions planned • Online automated supply and resupply systems expanding • For more businesses, online supply channels squeeze out costs Copyright © Houghton Mifflin Company. All rights reserved.
Place Fundamentals (cont’d) • • • Distribution channels Deliver downstream value to end users Digital direct distribution Multichannel distribution Channel agreements, structure Types of intermediaries Logistics/physical distribution Storage, handling, delivery Collaboration between producers, sellers, carriers Copyright © Houghton Mifflin Company. All rights reserved.
Place Issues • Internet is changing many place traditions • Some are traditional marketing in a new channel environment • Disintermediation – Collapsing channels – Goal: cost savings – Some industries more threatened than others, particularly travel agents – Infomediaries Copyright © Houghton Mifflin Company. All rights reserved.
Place Issues (cont’d) • Some cyberbrands reintermediating • Threat of cyber channel cannibalization • Metamediaries - or are they portals? – Unique communities – With or without commercial involvement – Affinity, instruction, time/event, aspirational • Automatic replenishment - rebuys • Multilevel marketing Copyright © Houghton Mifflin Company. All rights reserved.
Consumer Channel Strategies • Many online channel strategies are evolutionary, not revolutionary • What consumers want from online storefronts – Convenience, information, speed, privacy and security, service, simplicity, convergence • Etailing - the third significant transformation of the retail industry Copyright © Houghton Mifflin Company. All rights reserved.
Consumer Channel Strategies (cont’d) • Etailer decisions – Service level – Returns – Products and assortment – Trust – Inventory turns – Aftermarket service – Facilitation – Prices • Shopping basket abandonment • Content sites, P 2 P and auctions Copyright © Houghton Mifflin Company. All rights reserved.
Consumer Channel Strategies • Focus: Digital Products • Music Distribution • Old Model Artist > Label > Retail > Product Bundle • New Model ? Copyright © Houghton Mifflin Company. All rights reserved.
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