Professional Documents
Culture Documents
Submission
4.Channel
1.Summary
development
2.Marketing
5.Understanding
channels & Value
customer needs
network
Important functions:
Information, Promotion,
Ordering, Financing, risk taking,
physical possession, payment
and title.
Conflict in Marketing Channels results from:
Goal incompatibility
Poorly defined roles
Perceptual differences
Interdependent relationships
How do Companies Manage Conflict in Marketing Channels???
1. Provides Value
2. Performs a function and
3. Expects an economic return
These intermediaries constitute a marketing channel (also called a trade channel or
distribution channel).
For example:
oBank and Credit unions depend on a network of ATMs to offer their services.
Merchants: These type of intermediaries buy, take title to and resell the merchandise.
Agents: These type of intermediaries search for customers and may negotiate on the
producers behalf but they do not take title to the goods.
Facilitators: These type of intermediaries only assist in the distribution process but
neither takes title to the goods nor negotiates, purchase or sales.
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What is a Marketing Channel?
Set of interdependent organizations
involved in the process of making a product or
service available for use or consumption by the
consumer or business user.
The Importance of Channels
• Fill the gaps between the production and
consumption process.
• Reduces the amount of time and expenditure of the
manufacturer.
• Promote the product through efficient display etc.
• Apprising manufacturers of customer requirements
time to time.
• Add value to a company’s product.
Why are Marketing Intermediaries
Used?
The use of intermediaries results from their greater
efficiency in making goods available to target
markets.
Offers the firm more than it can achieve on its own
through the intermediaries:
Contacts,
Experience,
Specialization,
Scale of operation.
Purpose: match supply from producers to demand
from consumers.
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Marketing channel strategies
PUSH PULL
STRATEGY STRATEGY
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PUSH STRATEGY
• Manufacturer uses its sales force and trade
promotion money to induce intermediaries to
carry,promote,and sell the product to the end
users.
• It is appropriate where there is low brand loyalty
in a category,brand choice is made in the
store,product is the impulse item,and poduct
benefits are well unserstood.
PULL STRATEGY
• Manufacturer using advertising and promotion to
persuade consumer to ask intermediaries for the
product,thus inducing intermediaries to order it.
• It is appropriate where there is brand loyalty and
when people perceive defferences between brands
and when people choose the brand before they go
to the store.
How a channels Reduces the time and
expenditure of manufacturer
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•Channel Development
•A new firm typically starts as a local operation selling in a limited market, using
existing intermediaries. If the firm is successful, it might branch into new
markets and use different channels in different markets.
•International markets pose distinct challenges. Customers’ shopping habits
can vary by countries.
•International marketing involves coordinating the firm’s marketing activities in
more than one nation.
•The international marketing strategy is effectively realized by choosing the
suitable international marketing channel
•. The channel is the medium through which the firm’s global marketing strategy
is among the customers scattered all around the globe.
Example:
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According to NUNES and CESPEDES:-
Habitual shoppers.
High -value deal seekers
Variety-loving shoppers
High involvement shoppers
Habitual Customers
High value deal seekers
Variety loving shoppers
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A Value network is the system of partnerships and
alliances that a firm creates to source, augment,
and deliver its offerings.
A supply chain view of a firm sees markets as
destination points and amounts to a linear view of
the flow. The company should first think of the
target market, and then design the supply chain
backward from that point.
This view has been called demand chain planning.
A value network includes a firm’s suppliers, its suppliers’
suppliers, its immediate customers, and their end
customers.
A company needs to orchestrate these parties to enable it to
deliver superior value to the target market.
Demand chain planning yields several insights:
The company can estimate whether more money is made
upstream or downstream.
The company is more aware of disturbances anywhere in the
supply chain that might cause costs, prices, or supplies to
change suddenly
• Companies can go online with their business partners to
carry on faster and more accurate communications,
transactions, and payments to reduce costs, speed up
information, and increase accuracy.
• Marketers have traditionally focused on the side of the
value network that looks toward the customer. In the
future, they will increasingly participate in, influence their
companies’ upstream activities, and become network
managers
Managing this value network has required companies
to make increasing investments in information
technology (IT) and software
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