Professional Documents
Culture Documents
Chapter 5
Strategy in Marketing Channels
Objective 1:
Channel Strategy: The broad principles by which the firm expects to achieve its distribution objectives for its target market(s)
Objective 2:
Distribution Decisions
1. 2. The role of distribution in the firms overall objectives & strategies The role distribution should play in the marketing mix The design of the firms marketing channels The selection of channel members The management of the marketing channel in order to implement the firms channel design effectively & efficiently on a continuing basis The evaluation of channel member performance
3. 4. 5.
6.
Objective 3:
The higher the priority given to distribution, the higher the level at which it should be considered in formulating the organizations overall objectives and strategies
Inbound logistics
Operations
Service
Primary Activities
Objective 4:
Objective 5:
Distribution is the most relevant variable for satisfying target market demands. Parity exists among competitors in the other three variables of the marketing mix. A high degree of vulnerability exists because of competitors neglect of distribution. Distribution can enhance the firm by creating synergy from marketing channels.
The firm should choose distribution strategy for strategic emphasis
THEN:
Marketing channels are so closely linked to customer need satisfaction because it is through distribution that firms can provide the kinds and levels of service that make for satisfied customers.
Competitive Parity
Distribution advantages are not easily copied by competitors.
Distribution advantages are based on a combination of superior strategy, organization, and human capabilities.
Distribution Neglect
Competitors neglect of distribution strategies provides excellent opportunities.
The channel manager must analyze target markets to determine whether competitors have neglected distribution and whether vulnerabilities exist that can be exploited.
Because each channel member is an independent entity, rewarding opportunities exist for channel managers to cultivate cooperation among members.
Objective 6:
Differential advantage, also called sustainable competitive advantage, occurs when a firm attains a long-term, advantageous position in the market relative to competitors.
Caterpillar
A firm that plans the channel and makes decisions by viewing the relationship with channel members as a partnership or strategic alliance that offers recognizable benefits to the manufacturer & channel members on a long-term basis
Infiniti
Objective 7:
Reflect channel strategies the firm has developed to achieve its distribution objectives Be consistent with the firms broader marketing objectives & strategies Reflect the objectives & strategies of the organization as a whole
Objective 8:
Distribution intensity Targeted markets Products Company policies Middlemen Environment Behavioral dimensions
Distribution strategy
Marketing Mix
Pricing strategy
Promotion strategy
Objective 9:
A tool for motivating different types and sizes of channel members participating in various channel structures who may respond differently to various motivation strategies.
Objective 10:
Have provisions been made in the design and management of the channel to assure that channel member performance will be evaluated effectively?