Beruflich Dokumente
Kultur Dokumente
– Examples
• Clothes (US)
– Department stores
– Focused Specialty stores
– Factory outlets
– Online??
– Difference in India ???
Marketing Channels- Structure and Functions
– Examples
• Books (US)
– Book Store chains, Barnes & Noble
– Online, Amazon
– Discount Stores, 1 dollar store
– India Example????
– Evolution of Channels
– Assortment functions
» Sorting, breaking a heterogeneous supply into separate
homogeneous stocks e.g. Wheat by quality
» Accumulation: bringing similar stocks together
» Allocation: breaking down a homogeneous supply into smaller lots
» Assorting: collecting related goods for resale
– Utilities created: Possession, Place and Time
Marketing Channels- Structure and Functions
• Supply Side Factors
– Routinization of Transactions
• Order, value and payment
• Leads to efficiencies
• Inventory replenishment programs
– Reduction in No. of Contacts
• Manufacturer only to
• Manufacturer , wholesaler and retailer
• Online – disintermediation but also leads to competing with retail
chains, important in experience goods
Marketing Channels- Structure and Functions
• Channel Formats
– Retailer based channel formats
• Franchise
• Cataloguers
• Food Courts
• Department stores, shoppers stop
• Mass Merchandisers . Wal Mart
• Specialty Stores
• Convenience stores
Marketing Channels- Structure and Functions
• Channel Formats
– Service Provider based channel formats
• Contract warehousing
• Direct Mailer
• VARs
• Finance Companies
Marketing Channels- Structure and Functions
– Service Outputs
• Bulk Breaking
• Spatial Convenience
• Waiting or Delivery time
• Product Variety
– Two additional
• Customer service
• Information Provision
Marketing Channels: Segmentation & Service Outputs
• Bulk Breaking
– Reduces storage costs, increases convenience, per unit cost
– More the bulk breaking, higher the costs
– When more or less bulk breaking is required
– Home v/s Travel
– BPL class would require what??
• Spatial Convenience
– Reduces transportation, time taken, and search costs
– ATMs
– Cars for service to be picked up from home
– Does high traffic, bad roads affect this service output
Marketing Channels: Segmentation & Service Outputs
• Waiting Time:
– Objective is to reduce waiting time for sale or service
– Faster the delivery more the costs and vice versa
– Requirements vary
• Product variety
– Greater the product variety higher the service output & higher the costs
– Breadth & Depth parameters, varying requirements
– Assortment
– Right Assortment & Quick delivery could be a potent combination
Marketing Channels: Segmentation & Service Outputs
• Customer Service
– Eases the whole process
– Increases costs, sales and satisfaction
– Absence ?? Ginger??
• Information Provision
– Educates end users about product attributes, usage capabilities, pre-
purchase and post-purchase services
– Product demos
– Increases costs
– Online option
Marketing Channels: Segmentation & Service Outputs
– Cost,
• high cost leads to profit reduction or customer loss
• Low cost leads to less profit and customer gain
– Competition
• At same service output level, price needs to better
• At same prices, better service output is required
Marketing Channels: Segmentation & Service Outputs
• Ease of Entry
– Convenience goods
– Shopping goods like small appliances
– Specialty Goods like Home Theaters
• Reverse influence
Channel Structure & Intensity
• Manufacturer specific investments by Channel
Members
– Idiosyncratic Knowledge: Unique
– Unusual handling or storage
– Brand specific parts and know-how
– Customer Training
– Installation and post warranty handling knowledge
Channel Structure & Intensity
• Dependence Balancing: Trading territory
exclusivity for category exclusivity
• Influence of Web on buyers: knowledge thru web
& buy at the best bargain
Gap Analysis
• Environmental bounds
– Electric Supply
– Malls to close on Tuesday
• Managerial bounds
– Indifference of personnel to new techniques
– Expertise & Knowledge levels
• Types of Gaps
– Demand side
• When a service output supplied is greater than amount
demanded
• When a service output supplied is less than amount
demanded
Gap Analysis
• Types of Gaps
– Supply side
• Cost of providing a service output is high when it can be
lower (particularly in reverse logistics) , a cable manufacturer example
• Bucklin’s principle of postponement & speculation
(manufacturer v/s consumer, books case, retail sale of CDs v/s downloads)
• Balance of Power
• Net Dependence
• Imbalanced Dependence – Strategies
– Develop alternatives
– Organize a coalition
– Exit the situation
Channel Power
• Converting Latent power to exercised power
– Promise Strategy
– Threat Strategy
– Legalistic Strategy
– Request Strategy
– Information exchange strategy
– Recommendation strategy
Channel Conflict
• Conflict v/s Competition
• Measuring Conflict
– Count the issues of relevance, car dealer
– Assign importance to each issue, (Im)
– Frequency of discussion & disagreement, (Fr)
– Intensity of dispute, (In)
• Conflict = Im x Fr x In for each issue
• Index of Conflict = Sum of Conflicts on each issue
Channel Conflict
• Conflict is desirable, Functional Conflict
– Increases performance levels
– Competing Goals,
• CEOs V/s Owners
• Principals V/s Channel Partners
– Margin Per unit
– Inventory
– Marketing costs sharing
Channel Conflict
• Major Sources of Conflict
• Unwanted Channels
– Gray marketing
Channel Conflict
• Dangers of Conflict