Professional Documents
Culture Documents
Agenda
A Marketing Moment The Need for Channels Historical Approaches to the Market The Competitive Thrusts of Channels
Cost control Differentiation New Markets in a Financially Viable Manner
Agenda- Continued
Building a Channel Coverage Issues Building Value in Later Stages
Marketing Overview
3 Cs
Customer Competitor Company
Market Research
(Segment)
(Target)
(Position)
Product
Price
4 Ps
Place
Promotion
Memaska Steel
Manufacturer
Distributors
Outfitters
Customer
2000s
Covering new markets, in a financially viable manner using the resources of our partner firms to exceed customer expectations Competition at the level of business system versus business system---NOT product versus product Channels have become cooperative systems that are extremely market focused!
Cost Control
Cost Control
Reduced system inventory
Enhanced turns Reduced Capital expenditures Increased GMROI---ROOA
Finance Questions
How much does it cost? When will I get it back? How much risk is there? How much variability do I expect?
ROOA
Return on Operating Assets Inventory + Receivables minus Payables
Channels- Justification
Intermediary
Must routinize
- lot size, payment, frequency of delivery, communication...
Producers
Dupont
Manufacturer
Customer
Building a Channel?
Marketing Channels, 4th ed., Prentice Hall, Englewood Cliffs NJ. pp. 231. Source: Richard E Koon, appearing in Stern, Louis and Adel El-Ansary,
Cellular Carriers
Started with Volume Profits Amount of profits Timeliness of profits Risk of profits Summary: Lots of customers who are heavy users of the service, from day 1 and pay their bills on time.
Retail Locations
Margins Turns Traffic Risk Reductions Local Competitive Weapon Summary: Products that customers come in the store requesting, having better than average margins, turns, and reduced risk.
Maturity
Product Line Pricing
Decline
Next Gen.?
Bundle
More outlets Less specialized Competitive Brand promotion Intensive selling High Mfg involvement Tight relations
Price Cost
Order takers Broad lines Store promotion Low Brand-Add
Unbundle
Introduction Stage
Direct Selling Intensive Selling Customer Assurance High Information Content Specialized Professional Resellers Summary High Value Added Resellers
Mature Stages
Third Party Resellers Order Takers Self Service/Cash and Carry Low Provision of Information Broad Assortment Resellers Summary: Reduced value added by the channel-- especially to brands
Competition
Retailer AA Retailer Retailer B
Product Movement
Suggested Readings
Levitt, Theodore (1974), Innovations in Marketing: New Perspectives, Free Press, NY. Hkansson, Hkan (1990), Introduction, Hkan Hkansson ed., Industrial Technological Development: A Network Approach, Croom Helmn London pp. 3-25. Anderson, James C. and James A. Narus (1990), "A Model of Distributor Firm and Manufacturer Firm Working Partnerships," Journal of Marketing, 54 (January), Mitchell, Russell (1994), Virtual Worker: Any Place I Hang My Modem is Home Business Week , October 17, 1994 pp. 96-97. Shervani, Tasadduq and Philip Zerrillo The Albatross of New Product Innovations, Business Horizons, January 1997. Stern, Louis, Adel El-Ansary and Anne Coughlan, Marketing Channels, 5th ed., Prentice Hall, Englewood Cliff NJ 1997. Zerrillo, Philip and Dawn Iacobucci, Trade Promotions: a Call for a Rational Approach, Business Horizons, July 1996.
The Channel-Follow-Up
Why do we need channels? What are the factors driving the channel? What sort of things do you need to keep in mind when you pick channel partners? Why do we brand Products? How can the channel help you build a brand? How can channel decisions hurt your ability to build a brand
Channels Follow-Up
What are the potential problems of intensive or saturated distribution? Over the product life cycle do you expect more or less information to be available at the point of sale?