Beruflich Dokumente
Kultur Dokumente
13- 2
13- 3
13- 4
13- 5
MODES
Mode Cost Speed Slow Accessibility Capability Reliability Ease of tracing Low Low High Moderate Pipeline Low
Water
Truck Rail Air
Low
Varies Average High
Slow
Fast Average Fast
Low
High Average Low
High
High High
Low
High Average
Low
High Low High High
Internet Low
Mod-fast Increasing
Turnover Calculation Example Cost of Running Van/Other expenses Rs.20,000 p/month Distributors Margin 5% Break-Even (Turnover) Rs.400K Distributors Profit 5% Sales ???
13- 7
Trade Margin
Profit margin of the total trade chain involving distributors, wholesalers, retailer is termed as trade margin Stated trade margin vs. Actual trade margin, must be monitored by the company otherwise there will be issue of profit to trade becoming a reason for conflict Depends upon speed of turnover and companys brand franchise Gathering of market information Monitor Distributors ROI to ensure profit to trade High margin to wholesales are not recommended as they start under-cutting
13- 8
Rs.3.0M Rs.1.05M
Yearly Profit
ROI
35%
1. 2. 3. 4.
No Compensation 100% Compensation Percent of Sales Percent of Sales plus fixed amount
10 13- 10
Mismatch of Demand & Supply Conversion of long term credit into Cash & Investing the fund in some more profitable items Sales Promotion Scheme Large Wholesalers buying in Bulk at lower price then distributing the market at later stage Overpowering companys distribution network by large/investor type of wholesaler/dealer Not keeping track of their profitability Rolling of money by traders Low cost operation selling at lower cost Year-end incentive selling at lower price in anticipation of target incentives Selling the main product at cost or below cost to be competitive in the market & earning through accessories
7. 8.
11 13- 11
13 13- 13
Conflict
Conflict exists when a member of marketing channel perceives another members actions to be impeding of his goal Object of each others frustration Examples Pushing the inventory during lean period Extra discount (underhand) policy to push the sales Price Under-cutting Causes of Channel Conflict Role Incongruities A Role is a set of prescriptions defining what the behavior of position members should be
1.
14 13- 14
Conflict
Each member of channel is expected to fulfill certain role Manufacturers Demand generation, distributors Coverage / Shelf Share If any one of them deviates from the given role a conflict situation may result. Resource Scarcities Disagreement over allocation of some valuable resources to achieve goals E.G. Allocation of retailers Direct Selling to institutions
2.
15 13- 15
Conflict
3.
4.
Perceptual Differences Different perception of the same stimuli & attaching different interpretations E.G. Pop Materials Expectation Difference Expectations about the behavior of other channel member Predictions/forecasts concerning the future behavior of other channel These forecasts may turn to be inaccurate
16 13- 16
Conflict
5.
6.
Decision domain disagreements Channel members explicitly or implicitly carve out for themselves an area of decision making that they feel is exclusively theirs E.G. Pricing Decisions (Manufacturers Control VS Wholesalers domain) Goal Incompatibilities Each members has his own goals Incompatibility leads to conflict Conflicting Goals on shelf share in a particular shops Conflicting Goals on Coverage
17 13- 17
Conflict
7.
Communications Difficulties A foul-up or breakdown in communications can quickly turn a co-operative relationship into a conflicting one Feedback on market development program Channel Conflict & Efficiency Mostly - Negative Impact No Effect Higher level of dependency / commitment Positive Effect Conflict might serve as an impetus to reappraise their respective policies
18 13- 18
Conflict
Managing Channel Conflict
1.
2.
3.
Detect After the fact approach Negative Effect Early warning system Surveys/Visit/Actions M.C. Audit A periodic/regular evaluation of key areas of relationship Customer focus group meetings Distributors advisory councils/committees Regular meeting to detect conflicts Make conscious efforts to detect & solve conflict
19 13- 19
Conflict
Channel Conflict
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Pushing stock during lean period Extra discount (underhand) policy to push the sales Price under-cutting/cross flows Lack of consumer pull-demand generation activity by the manufacturers Lack of optimization of coverage/shelf share Allocation of retailers Allocation of towns/cities Re-organization of distribution set-up New Products Distribution Direct selling to institutions Effective use of P.O.S materials
20 13- 20
Conflict
11 12 13 14 15 16 17 18 19 20 21 22 Predictions / Forecasts of Sales Pricing decisions (Manufacturers Control VS Distributors/Wholesalers Domain) Conflicting goals on shelf share/coverage Communication difficulties Feedback on business/market development program Expectation on year-end profitability Profits to the trade Relations with top management Range availability Selling of competition products to increase profits Payment on time VS delivery of stores Priority of stock allocation at time of shortage
21 13- 21