Marketing Channels Delivering Customer Value Chapter 12 slide

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Marketing Channels: Delivering Customer Value Chapter 12 - slide

Marketing Channels: Delivering Customer Value Chapter 12 - slide

Channel Behavior and Organization Channel Behavior Marketing channel consists of firms that have partnered

Channel Behavior and Organization Channel Behavior Marketing channel consists of firms that have partnered for their common good with each member playing a specialized role Channel conflict refers to disagreement over goals, roles, and rewards by channel members • Horizontal conflict • Vertical conflict Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 2

Channel Behavior and Organization Conventional Distributions Systems Conventional distribution systems consist of one or

Channel Behavior and Organization Conventional Distributions Systems Conventional distribution systems consist of one or more independent producers, wholesalers, and retailers. Each seeks to maximize its own profits, and there is little control over the other members and no formal means for assigning roles and resolving conflict. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 3

Channel Behavior and Organization Vertical Marketing Systems Vertical marketing systems (VMSs) provide channel leadership

Channel Behavior and Organization Vertical Marketing Systems Vertical marketing systems (VMSs) provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system and consist of: • Corporate marketing systems • Contractual marketing systems • Administered marketing systems Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 4

Channel Behavior and Organization Corporate VMS Corporate vertical marketing system integrates successive stages of

Channel Behavior and Organization Corporate VMS Corporate vertical marketing system integrates successive stages of production and distribution under single ownership Kroger – 42 factories , 8000 private lables Safeway – 9 milk plants , 8 bakery plants , 4 ice cream plants , 4 soft drink bottling plants , 4 fruit and vegetable processing plant Luxottica- Ray Ban , Polo Ralph , D&G , Prada , Versace through optical chain Lens. Crafters and Sunglasses Hut Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 5

Corporate VMS Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12

Corporate VMS Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 6

Corporate VMS Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12

Corporate VMS Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 7

Channel Behavior and Organization Contractual vertical marketing system consists of independent firms at different

Channel Behavior and Organization Contractual vertical marketing system consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone. The most common form is the franchise organization. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 8

Channel Behavior and Organization Contractual vertical marketing system Franchise organization links several stages in

Channel Behavior and Organization Contractual vertical marketing system Franchise organization links several stages in the production distribution process – Manufacturer-sponsored retailer franchise system- Ford – Manufacturer-sponsored wholesaler franchise system –Coca Cola – Service firm-sponsored retailer franchise system – Mc Donalds , Pizza Hut Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 9

Channel Behavior and Organization Administered vertical marketing system has a few dominant channel members

Channel Behavior and Organization Administered vertical marketing system has a few dominant channel members without common ownership. Leadership comes from size and power. Parle , GE , Amul , HUL , P&G , Dabur , Gillette Big Bazar , Spencer’s & Wal Mart Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 10

Channel Behavior and Organization Horizontal Marketing System Horizontal marketing systems are when two or

Channel Behavior and Organization Horizontal Marketing System Horizontal marketing systems are when two or more companies at one level join together to follow a new marketing opportunity. Companies combine financial, production, or marketing resources to accomplish more than any one company could alone. Mc Donald's Express Versions of its restaurants in Wal Mart Store Easy Day and Habib’s Express Cut Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 11

Channel Behavior and Organization Multichannel Distribution Systems Hybrid Marketing Channels Multichannel Distribution systems (Hybrid

Channel Behavior and Organization Multichannel Distribution Systems Hybrid Marketing Channels Multichannel Distribution systems (Hybrid marketing channels) are when a single firm sets up two or more marketing channels to reach one or more customer segments Eureks Forbes Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 12

Channel Behavior and Organization Multichannel Distribution System Copyright © 2010 Pearson Education, Inc. Publishing

Channel Behavior and Organization Multichannel Distribution System Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 13

Channel Behavior and Organization Changing Channel Organization Disintermediation occurs when product or service producers

Channel Behavior and Organization Changing Channel Organization Disintermediation occurs when product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones Make My Trip. com , Yatra. com , Naukri. com , Netflix, Amazon. com Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 14

Channel Design Decisions Analyzing consumer needs Setting channel objectives Identifying major channel alternatives Evaluation

Channel Design Decisions Analyzing consumer needs Setting channel objectives Identifying major channel alternatives Evaluation Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 15

Channel Design Decisions Setting Channel Objectives • • Targeted levels of customer service What

Channel Design Decisions Setting Channel Objectives • • Targeted levels of customer service What segments to serve Best channels to use Minimizing the cost of meeting customer service requirements Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 16

Channel Design Decisions Identifying Major Alternatives • Types of intermediaries. e. g Dell •

Channel Design Decisions Identifying Major Alternatives • Types of intermediaries. e. g Dell • Number of marketing intermediaries • Responsibilities of channel members : Mc Donald's -promotional support , Record keeping system , Training at Hamburger University , General Management assistance Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 17

Channel Design Decisions No. Of Marketing Intermediaries Intensive distribution • Candy and toothpaste Exclusive

Channel Design Decisions No. Of Marketing Intermediaries Intensive distribution • Candy and toothpaste Exclusive distribution • Luxury automobiles and prestige clothing Selective distribution • Television and home appliance Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 18

Channel Design Decisions Evaluating the Major Alternatives Each alternative should be evaluated against: –

Channel Design Decisions Evaluating the Major Alternatives Each alternative should be evaluated against: – Economic criteria – Control – Adaptive criteria Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 19

Channel Design Decisions Designing International Distribution Channels • Channel systems can vary from country

Channel Design Decisions Designing International Distribution Channels • Channel systems can vary from country to country • Must be able to adapt channel strategies to the existing structures within each country Avon in China : ban on door-to-door selling forcing Avon to abandon its traditional Marketing approach & sell through retail shops Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 20

Marketing Logistics and Supply Chain Management Nature and Importance of Marketing Logistics Marketing logistics

Marketing Logistics and Supply Chain Management Nature and Importance of Marketing Logistics Marketing logistics (physical distribution) involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 21

Marketing Logistics and Supply Chain Management Nature and Importance of Marketing Logistics Copyright ©

Marketing Logistics and Supply Chain Management Nature and Importance of Marketing Logistics Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 22

Marketing Logistics and Supply Chain Management Nature and Importance of Marketing Logistics Supply chain

Marketing Logistics and Supply Chain Management Nature and Importance of Marketing Logistics Supply chain management is the process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers Competitive Advantage Improved Logistics will lead to cost saving http: //www. youtube. com/watch? v=VEA 9 Hl. GIST 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 23

Marketing Logistics and Supply Chain Management Major Logistics Functions Warehousing Inventory management Transportation Logistics

Marketing Logistics and Supply Chain Management Major Logistics Functions Warehousing Inventory management Transportation Logistics information management Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 24

Marketing Logistics and Supply Chain Management Transportation affects the pricing of products, delivery performance,

Marketing Logistics and Supply Chain Management Transportation affects the pricing of products, delivery performance, and condition of the goods when they arrive. Ajay S Mittal, CMD of Arshiya International; Anil K Gupta MD of CONCOR; and Ramesh Chandra Dubey, president of Association of Container Train Operator, share their perspective. http: //www. ndtv. com/video/player/money-mantra/making-logistics-efficient/146370 Truck Rail Water Pipeline Air Internet Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 25

Marketing Logistics and Supply Chain Management Logistics Information Management Logistics information management is the

Marketing Logistics and Supply Chain Management Logistics Information Management Logistics information management is the management of the flow of information, including customer orders, billing, inventory levels, and customer data • EDI (electronic data interchange) • VMI (vendor-managed inventory) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 26

Marketing Logistics and Supply Chain Management Integrated Logistics Management Third-party logistics is the outsourcing

Marketing Logistics and Supply Chain Management Integrated Logistics Management Third-party logistics is the outsourcing of logistics functions to third-party logistics providers (3 PLs) Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 12 - slide 27