Marketing Channels - Module 1: Where Mission Meets Market

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Preparation for the Marketing Channels exam at Edinburgh Business School Content extracted from the text book by Lou E. Pelton, Dr. David Strutton, and Dr. James R. Lumpkin.

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Marketing Channels - Module 1: Where Mission Meets Market

  1. 1. Marketing ChannelsModule 1: Where Mission Meets Market @sebinomics Preparation for the Marketing Channels exam at Edinburgh Business School Content extracted from the text book by Lou E. Pelton, Dr. David Strutton, and Dr. James R. Lumpkin All pictures used for educational purposes only. No copyright infringement intended.
  2. 2. 1.1 The Elements of Successful Marketing Channels To achieve success in a competitive arena, members of relay teams must pool individual resources to achieve collective goals through a connected system. In addition, this connected system must be flexible enough to accommodate changes in the environment.
  3. 3. 1.1 The Elements of Successful Marketing Channels Pooled Resources Distributors acting as field operatives, talking with customers, straightening up cases on retail floors.
  4. 4. 1.1 The Elements of Successful Marketing Channels Collective Goals A mission statement is an organization’s strategic charter – a public declaration of why it exists.
  5. 5. 1.1 The Elements of Successful Marketing Channels Connected System Organizations cannot exist without markets. All business competition emerges within marketing channels.
  6. 6. 1.1 The Elements of Successful Marketing Channels Flexibility As Alderson put it, the organizations and persons involved in channel flows must be ‘sufficiently connected to permit the system to operate as a whole, but the bond they share must be loose enough to allow for components to be replaced or added.’
  7. 7. 1.2 What is a Marketing Channel? A marketing channel can be defined as an array of exchange relationships that create customer value in the acquisition, consumption, and disposition of products and services. This definition implies that exchange relationships emerge from market needs as a way of serving market needs.
  8. 8. 1.3 Evolution of Marketing Channels Marketing channels always emerge out of a demand that marketplace needs be better served. Production Institutional The Relationship Era & Period & Marketing Marketing Distributive Selling Concept Era Practices Orientation
  9. 9. 1.4 Channel Intermediaries: The Customer Value Mediators Channel intermediaries are individuals or organizations who mediate exchange utility in relationships involving two or more partners.
  10. 10. 1.4 Channel Intermediaries: The Customer Value Mediators Contactual Efficiency Routinization Sorting Minimizing Uncertainty
  11. 11. 1.4 Channel Intermediaries: The Customer Value Mediators Contactual Efficiency Contactual efficiency describes this movement toward a point of equilibrium between the quantity and quality of exchange relationships between channel members. When only two parties are involved in an exchange, the relationship is said to be a dyadic relationship.
  12. 12. 1.4 Channel Intermediaries: The Customer Value Mediators Routinization The Economost system represents the state of the art in routinization. Routinization refers to the means by which transaction processes are standardized to improve the flow of goods and ser vices through marketing channels. Routinization itself delivers several advantages to all channel participants.
  13. 13. 1.4 Channel Intermediaries: The Customer Value Mediators Sorting In a channels context, sorting is often described as a smoothing function. Two principal tasks are associated with the sorting function. They are: a) Categorizing b) Breaking Bulk
  14. 14. 1.4 Channel Intermediaries: The Customer Value Mediators Minimizing Uncertainty The role that intermediaries play in reducing uncertainty is perhaps their most overlooked function. Types of uncertainty are: Need Uncertainty: what is available vs what is needed Market Uncertainty: # of sources available for a product or service Transaction Uncertainty: imperfect channel flows between buyers and sellers
  15. 15. 1.4 Functions performed by Marketing IntermediariesFacilitating Strategic Aims
  16. 16. 1.4 Functions performed by Marketing IntermediariesFulfilling Interaction Requirements
  17. 17. 1.4 Functions performed by Marketing Intermediaries Satisfying Delivery and Handling Requirements
  18. 18. 1.4 Functions performed by Marketing IntermediariesManaging Inventory Requirements
  19. 19. 1.4 Channels Relationship Model (CRM) The CRM provides a structure for examining how an array of exchange relationships can create customer value in the distribution of products and services.
  20. 20. 1.4 Channels Relationship Model (CRM) Array of Exchange Relationships 1st interaction: within the marketing organization (intraorganizational) 2nd interaction: between marketing organizations (interorganizational) 3rd interaction: between marketing organizations and their environments
  21. 21. 1.4 Channels Relationship Model (CRM) Creating Customer Value For customers, marketing channels create form, place, possession, and time utilities.
  22. 22. 1.4 Channels Relationship Model (CRM) Products and Services Flows Acquisition Consumption Outsourcing Disposition
  23. 23. Picture sources:http://173.254.42.91/wp-content/uploads/2011/07/cloud1.jpghttp://images4.fanpop.com/image/photos/24300000/The-Avengers-the-avengers-24318243-1600-1200.jpghttp://wallpapers-free.co.uk/backgrounds/food_and_drink/fruit/bowl-of-fruit.jpghttp://ruachsocialenterprise.net/wp-content/uploads/2011/05/We-Are-the-World.jpghttp://www.zastavki.com/pictures/1920x1200/2011/3D-graphics_Molecule_027928_.jpghttp://cherryblossomstudio.ca/wpsite/wp-content/gallery/photos/mikayoga-80.jpghttp://www.education.umd.edu/mimaue/images/girl_math_thinking.jpghttp://www.humor-pictures.com/wp-content/uploads/2011/10/lego.jpghttp://www.pcdesktopwallpaper.com/albums/wallpapers-sports/Climbing-020.jpghttp://goinoffsafaris.com.au/files/Sealion-Interaction.jpghttp://www.fireflycoaching.com/wp-content/uploads/2010/06/MPj040887600001.jpghttp://argosymg.com/images/shell/background/asset-inventory.jpghttp://4.bp.blogspot.com/-39-VpYbsYlk/TtI11dYiIfI/AAAAAAAAAJE/R4vqBioDayw/s1600/rel1.jpghttp://www.renthal.com/Image/R1OffroadChainSprocket.JPG
  24. 24. @sebinomics

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