Download - brand strategic marketing
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Managing Marketing Channel
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A channel of distribution comprises a set of
institutions which perform all of the activities utilised to move a product and its
title from production to consumption
Marketing Channel
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A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user.
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Growing Importance of Marketing Channels?Growing Importance of Marketing Channels?
1. The explosion of information technology and
E-commerce
2. A greater difficulty in gaining a sustainable competitive advantage
3. The growing power of distributors, especially retailers in marketing channels
4. The need to reduce distribution costs
1.1. 2. A greater difficulty in gaining a sustainable competitive
advantage 3. The growing power of distributors, especially retailers
in marketing channels 4. The need to reduce distribution costs
Yahoo! eBay
Amazon.com
The prediction:Disintermediation — reduction of number of intermediaries
The reality:Reintermediation—evolution of a new type of intermediary
The explosion of information technology and E-commerceThe explosion of information technology and E-commerce
1. The explosion of information technology and E- commerce2. 2. 3. The growing power of distributors, especially retailers in marketing channels 4. The need to reduce distribution costs
A greater difficulty in gaining a sustainable A greater difficulty in gaining a sustainable competitive advantagecompetitive advantage
Place (distribution), or Marketing
Channel Strategy Sustainable competitive advantage
Potential for gaining competitive advantage because place is more difficult for competitors
to copy
1. The explosion of information technology and E-commerce 2. A greater difficulty in gaining a sustainable competitive advantage 3.3. 4. The need to reduce distribution costs
The growing power of distributorsThe growing power of distributors
Power retailers as of consume marketsgatekeepers
Act as buying agents for customers rather than as selling agents for manufacturers
1. The explosion of information technology and E- commerce 2. A greater difficulty in gaining a sustainable competitive
advantage 3. The growing power of distributors 4.4.
The need to reduce distribution costs The need to reduce distribution costs
Marketing channels are the most recent target for
reducing distribution costs.
The focus is on channel structure and management.
Channel Structure
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The group of channel members to which a set of distribution tasks has been allocated.
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Marketing channels for Consumer Goods
Dominos’ Pizza General Motors Cadburys Kellogg's
Agent
Wholesaler
Consumer Consumer Consumer Consumer
Retailer RetailerRetailer
Wholesaler
Marketing channels for Industrial Goods
IBM / Airbus Caterpillar Stake Fastener Harkman Electric
AgentAgent
Industrial user
Industrial user
Industrial user
Industrial user
Industrial distributor
Industrial distributor
Factors in choosing the best distribution channel
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Nature of the productPerishable/fragile? Technical/complex? Customised? Type of product – e.g. convenience, shopping, specialityDesired image for the product – if intermediaries are to be
used, then it is essential that those chosen are suitable and relevant for the product.
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Marketing Channel FlowsMarketing Channel Flows
Product Flow
Promotion Flow
Information Flow
Ownership Flow
Negotiation Flow
Distribution Intensity
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Exclusive Distribution
Selective Distribution
Intensive Distribution
Integrated Distribution
Intensity of Channel Structure
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Channel intensity: the number of intermediaries at each level of the marketing channel.
All PossibleIntermediaries
Relatively FewIntermediaries
Just OneIntermediary
Intensive ExclusiveSelective
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