Delivering value


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Delivering value

  1. 1. What’s Important (interesting?) from Part 6, Chapters 15 and 16 Delivering Value s Managerial Marketing Fall 2010
  2. 2. Successful Value Delivery Suppliers • Look up the supply chain Manufacturers Firm • Look down the distribution chain Customers
  3. 3. Increased market segmentation can help firms reach more customers. In Marketing-Speak, how goods and services get to the final consumer or user is through a MARKETING CHANNEL • Merchants - take title and resell goods • Agents - act on firms’ behalf, don’t take title • Facilitators - airline tickets
  4. 4. Channel Strategies • Push Strategy: induce intemediaries to carry and sell products. • Pull Strategy: use marketing and advertising to induce consumer demand.
  5. 5. Channel Development • Some firms develop strategies for local or regional markets • Some firms use the same strategy everywhere, which can be successful but can also cause problems. • Walmart - success and failure
  6. 6. Hybrid Channels
  7. 7. Customer Needs • Habitual Shoppers - regulars • High Value Deal Seekers - bargain hunters • Variety Loving Shoppers - adventurers • High Involvement Shoppers - high maintenance
  8. 8. Value Networks -Look through the channels to find ways to increase value. -Consider the end user / customer and work back from there. -Discover where profit margins are highest. -The interface with the customer is the face of your firm.
  9. 9. Channel Functions and Flows Title, goods Forward Flow Suppliers, Firm Customers Manufacturers Backward Flow Orders, returns, end of life take backs A Firm may require any number of channels • Sales Channel Manufacturing Firm • Delivery Channel • Service Channel
  10. 10. One-Level Channel Manufacturers Retailer Customers Consider also reverse flow channels “That’s not my job.” • Use USPS as one of their channels • Use the internet as another • User content informs
  11. 11. Channel Design Decisions • Lot size; Hertz purchasing vs. individual Intermediaries: Objectives and Exclusive Distribution • Waiting / delivery time Selective Distribution Constraints Intensive Distribution • Spatial convenience / proximity to goods • Product variety found through channel • Service backup; other $0.01 services provided by channel
  12. 12. Economic Analysis of Channel Choices • Sales Agent vs. Company Sales Team • Principal / Agent Questions The Channel is the Company Channel Power: Coercive Power Reward Power Legitimate Power Expert Power Referent Power $4,032 / sf
  13. 13. Channel Evaluation Vertical Marketing system: Horizontal Marketing system: Firm seeks to have more Firm seeks to saturate market with control over interface with sometimes overlapping channels. customer. Disney with their own retail Southwest outlets, plus video sales at Walmart, other retailers. Pitfalls: Dilution and cannibalization Channel conflict and competition
  14. 14. Harley Davidson • Online customers choose a retail store. Helps to align goals, and to allow channels to supplement each other.
  15. 15. E-commerce supplement • Firms increasingly using the internet to channels, or to have more control over customer interface. • Seeking more direct interface, chats with online customers, targeted ads, etc. • M-commerce
  16. 16. Managing, Retailing, Wholesaling, Logistics Broad Categories of Retailing • Bloomingdale’s • Tiffany’s • Sunglasses Hut • Walmart
  17. 17. The Retail Environment • Challenges - differentiation and shelf space • RFID’s and technology • Decline of the middle market retailers • Interesting niches, Trader Joe’s, Whole Foods • Private Labels, Threat and Opportunity
  18. 18. Wholesaling and Logistics • Where do firms add value: wholesalers and access to customer information, distribution, marketing channels; financing and risk; transportation • Trend towards vertical integration • Logistics and supply chain management • Balance of conflicting forces such as time vs. cost
  19. 19. Delivering Value s When is it enough? Are we just conduits for money to flow through? What is the price we pay for a constant barrage of marketing? Marketing, like Markets, is values-neutral, materially rewarding those who deliver value How can we not only deliver value, but also values?