DELIVERING VALUE
marketing channel system
- the particular set of marketing channels
employed by a firm.
marketing channels
- sets of interdependent organizations
involved in the process of making a
product or service available for use or
consumption
push strategy
- when the manufacturer uses its sales
force and trade
promotion money to induce
intermediaries to carry, promote, and
sell the product to end users.
pull strategy
- when the manufacturer uses Advertising
and promotion to persuade consumers to
ask intermediaries for the product, thus
inducing the intermediaries to order it.
Hybrid channels or multichannel
marketing
- occurs when a single firm uses two or
more marketing channels to reach
customer segments.
demand chain planning
- the process of designing the supply
chain based on adopting a target
market perspective and working
backward.
value network
- a system of partnerships and alliances
that a firm creates to source, augment,
and deliver its offerings.
Major Channel Alternatives
1. Exclusive distribution
- means severely limiting the number of
intermediaries. It’s appropriate when the producer
wants to maintain control over the service level and
outputs offered by the resellers, and it often includes
exclusive dealing arrangements
2. Selective distribution
- relies on only some of the intermediaries
willing to carry a particular product.
3. Intensive distribution
- places the goods or services in as many
outlets as possible
Channel conflict
is generated when one channel
member’s actions prevent another
channel from achieving its goal
Strategies to Manage Channel Conflict
1. Strategic Justification
- Developing special versions of products
for different channel
members—branded variants
2. Dual Compensation
- pays existing channels for sales made
through new channels
3. Superordinate Goals
- Channel members can come to an
agreement on the fundamental or
superordinate goal they are jointly seeking,
whether it is survival, market share, high
quality, or customer satisfaction
4. Employee Exchange
- exchange persons between two or more
channel levels.
5. Joint Memberships
- marketers can encourage joint memberships in
trade associations.
6. Co-option Co-optation
- is an effort by one organization to win the
support of the leaders of another by
including them in advisory councils, boards
of directors, and the like.
7. Diplomacy, Mediation, and Arbitration
Diplomacy takes place when each side
sends a person or group to meet with its
counterpart to resolve the conflict
Mediation relies on a neutral third
party skilled in conciliating the two
parties’ interests
arbitration two parties agree to
present their arguments to
one or more arbitrators and accept
their decision
8. Legal Recourse If nothing else proves
effective, a channel partner may choose
to file a lawsuit.
CHANNEL INTEGRATION AND
SYSTEMS
I. Vertical Marketing Systems
A. conventional marketing channel
- consists of an independent producer, wholesaler(s), and retailer(s).
Each is a separate business seeking to maximize its own profits, even if
this goal reduces profit for the system as a whole. No channel member
has complete or substantial control over other members.
B. vertical marketing system (VMS)
- includes the producer, wholesaler(s), and retailer(s) acting as a unified
system. One channel member, the channel captain, owns or franchises the
others or has so much power that they all cooperate.
B.1 corporate VMS
- combines successive stages of production and distribution
under single ownership.
B.2 administered VMS
- coordinates successive stages of production anddistribution
through the size and power of one of the members.
B.3 contractual VMS
- consists of independent firms at different levels of production
and distribution, integrating their programs on a contractual
basis to obtain more economies or sales impact than they could
achieve alone.
B.3.1 Wholesaler-sponsored voluntary chains
B.3.2 Retailer cooperatives
B.3.3 Franchise organizations
II. Horizontal Marketing Systems
- two or more unrelated companies put
together resources or programs to exploit
an emerging marketing opportunity.
III. Integrating Multichannel
Marketing Systems
- the strategies and tactics of selling through
one channel reflect the strategies and tactics
of selling through one or more other channels.
E-commerce
- uses a Web site to transact or facilitate
the sale of products and services online
B2C E-Commerce
A transaction conducted over the Internet
between a business and a consumer
B2B E-Commerce
A transaction conducted between two
businesses over the Internet.
M-COMMERCE MARKETING
Mobile Marketing is a set of practices that
enables organizations to communicate and
engage with their audience in an interactive
and relevant manner through and with any
mobile device or network.
(Definition by MOBILE MARKETING
ASSOCIATION)
Retailing
- includes all the activities in selling
goods or services directly to final
consumers for personal, Non-business
use.
Wholesaling
- includes all the activities in selling
goods or services to those who buy for
resale or business use. It excludes
manufacturers and farmers because
they are engaged primarily in
production, and it excludes retailers.