V47 Ch15 Designing And Managing Integrated Marketing Channels

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V47 Ch15 Designing And Managing Integrated Marketing Channels

  1. 1. Designing and Managing Integrated Marketing Channels Anthony T. Medalla Ateneo Graduate School of Business December 1, 2009
  2. 2. Outline: Designing and Managing Integrated Marketing Channels <ul><li>Importance of marketing channels and values network </li></ul><ul><ul><ul><li>Channel development </li></ul></ul></ul><ul><ul><ul><li>Hybrid Channels </li></ul></ul></ul><ul><li>Understanding customer needs and value network </li></ul><ul><ul><ul><li>Factors that consumers consider </li></ul></ul></ul><ul><ul><ul><li>Buyers/shoppers category </li></ul></ul></ul><ul><ul><ul><li>Value Network </li></ul></ul></ul>
  3. 3. Outline: Designing and Managing Integrated Marketing Channels <ul><ul><ul><li>SIVA replaced the traditional marketing 4 P’s </li></ul></ul></ul><ul><li>The role of marketing channels </li></ul><ul><ul><ul><li>Channel functions and flows </li></ul></ul></ul><ul><ul><ul><li>Channel levels </li></ul></ul></ul><ul><ul><ul><li>Service sector channels </li></ul></ul></ul><ul><li>Channel design decisions </li></ul><ul><li>Establishing objectives and Constraints </li></ul>
  4. 4. Outline: Designing and Managing Integrated Marketing Channels <ul><li>Identifying and Evaluating Major Channel Alternatives </li></ul><ul><ul><ul><li>Types of Intermediaries Strategies </li></ul></ul></ul><ul><li>Channel management decisions </li></ul><ul><ul><ul><li>Selecting Channel Members </li></ul></ul></ul><ul><ul><ul><li>Training and Motivating Channel Member </li></ul></ul></ul><ul><li>Channel integration systems </li></ul><ul><ul><ul><li>Vertical Marketing Systems </li></ul></ul></ul>
  5. 5. Outline: Designing and Managing Integrated Marketing Channels <ul><ul><ul><li>Integrated Multichannel Marketing System </li></ul></ul></ul><ul><ul><ul><li>Horizontal Marketing Systems </li></ul></ul></ul><ul><li>Conflict, cooperation and competition </li></ul><ul><ul><ul><li>Types of conflict and competition </li></ul></ul></ul><ul><ul><ul><li>Causes of Channel Conflict </li></ul></ul></ul><ul><ul><ul><li>Managing Channel Conflict </li></ul></ul></ul><ul><ul><ul><li>Dilution and Cannibalization </li></ul></ul></ul><ul><ul><ul><li>Legal and ethical issues in channel relations </li></ul></ul></ul>
  6. 6. Outline: Designing and Managing Integrated Marketing Channels <ul><li>E-commerce marketing practices </li></ul><ul><ul><ul><li>Pure-Click Companies </li></ul></ul></ul><ul><ul><ul><li>Brick and Click Companies </li></ul></ul></ul><ul><ul><ul><li>M-Commerce </li></ul></ul></ul>
  7. 7. Importance of marketing channels and values network <ul><li>The importance of Channels </li></ul><ul><ul><li>Affect all other marketing decisions </li></ul></ul><ul><ul><li>Represent a substantial opportunity cost </li></ul></ul><ul><ul><li>Convert potential buyers to profitable customers </li></ul></ul><ul><ul><li>Channels consist of intermediaries or trade channels </li></ul></ul><ul><ul><li>Strategies in managing intermediaries </li></ul></ul><ul><ul><ul><li>Push strategy - intermediaries’ promotional initiative </li></ul></ul></ul><ul><ul><ul><li>Pull strategy – manufacturer’s promotional initiative </li></ul></ul></ul>
  8. 8. <ul><li>Channel Development </li></ul><ul><ul><li>Successful firm branch into new markets </li></ul></ul><ul><ul><li>Test new channel approach </li></ul></ul><ul><li>Hybrid Channels </li></ul><ul><ul><li>Also known as go-to-market (direct to customers style) </li></ul></ul>Importance of marketing channels and values network
  9. 9. <ul><li>Factors that consumers consider </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Product assortment </li></ul></ul><ul><ul><li>Convenience of a channel option </li></ul></ul><ul><ul><li>Own particular shopping goals (economic, social or experiential) </li></ul></ul>Understanding customer needs and value network
  10. 10. <ul><li>Buyers/shoppers category </li></ul><ul><ul><li>Habitual shoppers </li></ul></ul><ul><ul><li>High-value deal seekers </li></ul></ul><ul><ul><li>Variety-loving shoppers </li></ul></ul><ul><ul><li>High-involvement shoppers </li></ul></ul>Understanding customer needs and value network
  11. 11. <ul><li>Value Network </li></ul><ul><ul><li>Think of a target market </li></ul></ul><ul><ul><li>Design the backward supply chain from the target market </li></ul></ul><ul><li>SIVA replaced the traditional marketing 4 P’s </li></ul><ul><ul><li>Solutions </li></ul></ul><ul><ul><li>Information </li></ul></ul><ul><ul><li>Value </li></ul></ul><ul><ul><li>access </li></ul></ul>Understanding customer needs and value network
  12. 12. <ul><li>Channel functions and flows </li></ul><ul><ul><li>Performs the moving goods from producers to consumers </li></ul></ul><ul><li>Channel levels </li></ul><ul><ul><li>Zero level (direct marketing)- manufacturer selling directly to consumer </li></ul></ul><ul><ul><li>One level – contains one selling intermediary e.g. retailer </li></ul></ul><ul><ul><li>Two level – contains two intermediary (wholesaler, retailer) </li></ul></ul>The role of marketing channels
  13. 13. <ul><ul><li>Three level – contains three intermediary (wholesaler, jobber, retailer) </li></ul></ul><ul><li>Service sector channels </li></ul><ul><ul><li>Services that needs to be delivered to consumers (e.g. health/medical service, education, etc) </li></ul></ul>The role of marketing channels
  14. 14. <ul><ul><li>System requires… </li></ul></ul><ul><ul><ul><li>Analyzing </li></ul></ul></ul><ul><ul><ul><li>Customer needs </li></ul></ul></ul><ul><ul><ul><li>Establishing channel objectives </li></ul></ul></ul>Channel Design Decisions
  15. 15. <ul><ul><li>Lot size </li></ul></ul><ul><ul><li>Waiting and delivery time </li></ul></ul><ul><ul><li>Spatial convenience </li></ul></ul><ul><ul><li>Product variety </li></ul></ul><ul><ul><li>Service backup </li></ul></ul>Analyzing Customer’s Desired Service Output Levels
  16. 16. <ul><ul><li>Should state the channel objectives </li></ul></ul><ul><ul><li>Establish targeted service output levels </li></ul></ul><ul><ul><li>Put in mind objectives vary with product characteristics </li></ul></ul><ul><ul><li>Should prepare the objectives to larger environment </li></ul></ul>Establishing Objectives and Constraints
  17. 17. <ul><li>Types of Intermediaries Strategies </li></ul><ul><ul><li>Exclusive Distribution – limiting the number of intermediaries </li></ul></ul><ul><ul><li>Selective Distribution – relies on more than a few but less than all of the available intermediaries </li></ul></ul><ul><ul><li>Intensive Distribution – places goods/products to all available outlets. </li></ul></ul>Identifying and Evaluating Major Channel Alternatives
  18. 18. <ul><li>Selecting Channel Members </li></ul><ul><ul><li>Producers should determine the selected intermediaries </li></ul></ul><ul><ul><li>Evaluate the intermediaries reputation (yrs of experience, carried growth, profit record, etc.) </li></ul></ul>Channel Management Decisions
  19. 19. <ul><li>Training and Motivating Channel Member </li></ul><ul><ul><li>Coercive power – relation withdrawal </li></ul></ul><ul><ul><li>Reward power – extra benefit </li></ul></ul><ul><ul><li>Legitimate power – contract/SLA ‘s </li></ul></ul><ul><ul><li>Expert power – manufacturer’s expert knowledge </li></ul></ul><ul><ul><li>Referent power – intermediaries’ reputation </li></ul></ul>Channel Management Decisions
  20. 20. <ul><li>Vertical Marketing Systems </li></ul><ul><ul><li>Corporate VMS </li></ul></ul><ul><ul><li>Administered VMS </li></ul></ul><ul><ul><li>Contractual VMS </li></ul></ul><ul><li>Horizontal Marketing Systems </li></ul><ul><li>Integrated Multichannel Marketing Systems </li></ul>Channel Integration and Systems
  21. 21. <ul><li>Types of conflict and competition </li></ul><ul><ul><li>Vertical Channel conflict </li></ul></ul><ul><ul><li>Horizontal Channel conflict </li></ul></ul><ul><ul><li>Multichannel conflict </li></ul></ul><ul><li>Causes of Channel Conflict </li></ul><ul><ul><li>Goal incompatibility </li></ul></ul><ul><ul><li>Unclear roles and rights </li></ul></ul>Conflict, Cooperation and Competition
  22. 22. <ul><ul><li>Differences in preception </li></ul></ul><ul><ul><li>Intermediaries’ dependence on the manufacturer </li></ul></ul><ul><li>Managing Channel Conflict </li></ul><ul><ul><li>Adaptation of superordinate goals </li></ul></ul><ul><ul><li>Exchange of employees </li></ul></ul><ul><ul><li>Joint membership in trade associations </li></ul></ul><ul><ul><li>Co-optation </li></ul></ul>Conflict, Cooperation and Competition
  23. 23. <ul><ul><li>Diplomacy, mediation, or arbitration </li></ul></ul><ul><ul><li>Legal recourse </li></ul></ul><ul><li>Dilution and Cannibalization </li></ul><ul><ul><ul><li>-avoid to dilute brand/product due to inappropriate channels </li></ul></ul></ul><ul><li>Legal and ethical issues in channel relations </li></ul>Conflict, Cooperation and Competition
  24. 24. <ul><li>Pure-Click Companies </li></ul><ul><ul><ul><li>search engines </li></ul></ul></ul><ul><ul><ul><li>Internet service providers (ISP) </li></ul></ul></ul><ul><ul><ul><li>Commerce sites </li></ul></ul></ul><ul><ul><ul><li>Transaction sites </li></ul></ul></ul><ul><ul><ul><li>Content sites </li></ul></ul></ul><ul><ul><ul><li>Enabler sites </li></ul></ul></ul>E-Commerce Marketing Practices
  25. 25. <ul><li>Brick and Click Companies </li></ul><ul><ul><ul><li>Combination of internet and retail selling </li></ul></ul></ul><ul><li>M-Commerce </li></ul><ul><ul><ul><li>Purchasing thru cell phone or PDA’s </li></ul></ul></ul>E-Commerce Marketing Practices
  26. 26. Summary: Designing and Marketing Integration Marketing Channels <ul><li>Importance of marketing channels and values network </li></ul><ul><li>Understanding customer needs and value network </li></ul><ul><li>The role of marketing channels </li></ul><ul><li>Channel design decisions </li></ul><ul><li>Establishing objectives and Constraints </li></ul>
  27. 27. Summary: Designing and Marketing Integration Marketing Channels <ul><li>Identifying and Evaluating Major Channel Alternatives </li></ul><ul><li>Channel management decisions </li></ul><ul><li>Channel integration systems </li></ul><ul><li>Conflict, cooperation and competition </li></ul><ul><li>E-commerce marketing practices </li></ul>
  28. 28. Conclusion: Designing and Marketing Integration Marketing Channels <ul><li>Successful value creation needs successful value delivery thru various marketing channels </li></ul>

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