hogeschool van amsterdam interactieve media distribute or die: offline and online distribution...

Hogeschool van Amsterdam Interactieve Media

Distribute or die: Offline and online distribution strategy

Hoorcollege marketing blok 2 week 7


Learning goals

By the end of the reading and colleges you should understand: How place fits into the overall marketing mix The types of distribution channels available What is channel conflict and some solutions for this issue How distribution relates to interactive media products Some of the main trends in distribution Some ways of choosing distribution channels


Agenda

Introduction: what is place?

Types of distribution channels

Channel conflict

Trends in distribution

Interactive media and distribution

10 tips for choosing and managing distribution channels

Summary


What is place?

Place in the 4Ps of marketing refers to all aspects of getting the product/service/idea from the producer to the end consumer

It is also called distribution or distribution channels

It is an important, but often neglected element of the marketing mix When done well it can help ensure success When things go wrong it can lead to big problems


Why is place part of the marketing mix?


Place: the golden rule

Location!

Location!

Location!


What sort of things can go wrong?

Choosing the wrong place A place where the customer isn’t A place that is not consistent with positioning / marketing mix

Fighting between places

Not enough product in the right place Imagine this happening during a promotional activity

Too much product in the right or wrong place

Not developing distribution channels to keep up with customers


Types of distribution channels


Distribution channels

These are the routes that companies use to get their product to the customer

Channels are normally split by: Customer type

Business to consumer channels (B2C) Business to business channels (B2B)

Distribution type Direct channels Indirect channels


Indirect channels cost money


Why do organizations do indirect business?

Because distributors do a lot of work including: Distribution Financing Risk taking

Esp. inventories

Providing information Marketing intelligence to producer

Promotion Customer management Acquisition Matching needs to products Negotiation of contracts / prices


Examples of direct channels


Examples of indirect channels


Channel conflict


What is channel conflict?

Most distribution channels are made up of separate companies Often these companies are competitors

One of the main problems is that they often conflict This uses time And can drive the going price down

Two sorts of channel conflict: Horizontal conflict Vertical conflict


Horizontal conflict


Vertical conflict


Managing channel conflict

The key is to manage your channels

Options include Avoid large pricing differences between channels Maintain regular contact Develop channel specific line-ups Channel specific support

Logistics Promotions Service Financing


Interactive media and distribution


Interactive media is a distribution channel


Tangible products

The web has opened up many new distribution channels for tangible products Both direct and indirect

channels

Consumers are moving to these channels

Increased risk of channel conflict


Services

Interactive media has opened new channels for services and is especially popular with financial services

ATMs (pinautomaats) online & mobile banking are revolutionizing banks


Software

Online distribution of software is an obvious step

A number of different models Direct sales Shareware Free software

The “free” model has been very successful for Adobe

Risk of channel conflict very high in some areas Music / film


Interactive media products

Interactive media also provides a channel for interactive media products E.g. Google search (site

search, desktop, mobile), adwords

This is a new trend, but it seems to have potential Part of Google’s success is

its innovative approach to “distribution” of its products

The phenomenon of “widgets” and “embedding” make this a more interesting option in future


Trends in distribution


Shopping as a lifestyle and experience

Shopping is a leisure activity 84% of UK adults enjoy

shopping

Shopping is social

Shopping is used by some as therapy

Shopping can be an enjoyable experience

Many retailers and shopping centres are trying to tie into this trend

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Move online

More people shopping online (672m worldwide)* Europeans purchase more

frequently online than North Americans

Security issues being resolved

Familiarity helps

* Source: AC Nielson


Growth in retailer strength

Large retailers have more power than ever before

This leads to better prices for consumers

But killing smaller specialists

May reduce choice long-term

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1. Be where the customer is Ready to buy Open to influence

2. Ensure the channel fits positioning

3. Visibility is everything Ensure you have shelf-space

4. Treat your distribution as partners Look after them and they will

look after you

5. Minimize channel conflict through strong management

6. Follow the customer

7. Develop new channels

8. Different channels require / expect different profit marginsThese might not fit your business

model

9. No distribution channel “has to have you”

10. Never underestimate how difficult it is to enter new channels


Summary

Distribution is important though sometimes neglected

The “place” should reflect positioning (and support the rest of the marketing mix)

Distribution needs to be strongly managed to avoid channel conflict

Place includes interactive media, in the case of interactive media products there are many new opportunities to distribute products

Trends in online and offline distribution are leading to many opportunities and threats of channel conflict

hogeschool van amsterdam interactieve media distribute or die: offline and online distribution...

Documents

distribution interactive

customer channels

wrong place

interactive media products

right place

distribution financing

consumer channels b2c

place fits