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Marketing channel strategy

Marketing channel strategy



Marketing channel strategy

Marketing channel strategy



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    Marketing channel strategy Marketing channel strategy Presentation Transcript

    • Chapter 7 Marketing Channel Strategy and Management
    • The Channel Selection Decision Fundamental Questions
      • Who are potential customers ?
      • Where do they buy ?
      • When do they buy ?
      • How do they buy ?
      • What do they buy ?
    • Marketing Channel Alternatives Producer Ultimate Buyers Brokers or Agents Distributors or Wholesalers Retailers or Dealers
    • Direct versus Indirect Distribution
      • Direct - using firm’s own distribution, usually used when:
      • intermediaries are not available or are not capable of satisfying target market needs
      • target markets are easily identifiable
      • personal selling is an important communication tool for the company
      • the company has a wide variety of offerings for the target market
      • organizational resources are available
      • Indirect - using intermediaries
      • type, location, density and number of channels must be determined
      • can sometimes perform distribution activities more efficiently and less expensively
      Direct versus Indirect Distribution
    • Electronic Marketing Channels
      • ...use the Internet to make goods and services available to consumers
      • Disintermediation -- elimination of traditional intermediaries and direct distribution through electronic marketing channels
    • Ultimate Buyers Representative Electronic Marketing Channels Amazon.com Book Publisher Book Wholesaler Amazon.com (Virtual Retailer) Dell Computer Dell.com Airline Travelocity (Virtual Agent) Travelocity.com
    • Channel Selection at the Retail Level
      • Type and place decisions depend on the buying requirements of the target market and the potential profitability of the outlets
      • Number of intermediaries carrying the firm’s offering in a geographic area or density also needs to be determined
    • Exclusive Intensive Selective Extent of Distribution Coverage Wrigley’s Coke Levi’s Sony Lexus Rolex
    • Dual Distribution
      • occurs when an organization distributes its offering through 2 or more different marketing channels that may or may not compete for similar buyers
      • the main consideration is whether it will provide incremental sales revenue or cannibalize existing sales
    • Intermediary Requirements
      • Intermediaries
        • are concerned with the adequacy of the offering
        • require marketing support
        • seek a degree of exclusivity
        • expect a profit margin consistent with the functions they are expected to perform
    • Trade Relations
      • Channel Conflict
      • Sources of Channel Conflict :
        • when one channel member bypasses another
        • over how profit margins are distributed
        • when manufacturers believe that retailers or wholesalers are not giving their products enough attention
        • dual distribution
    • Channel-Modification Decisions
      • Reasons:
      • shifts in geographical concentration of buyers
      • inability of existing intermediaries to meet the needs of buyers
      • costs of distribution
    • Factors in Modification Decisions
      • Will the change improve the effective coverage of the sought target markets?
      • Will the change improve customer satisfaction?
      • Which marketing functions must be absorbed?
      • Does the organization have the resources to perform the new functions?
      • What will be the effect on other channel members?
      • What will be the effect on long-term organizational objectives?