Marketing Channels - Module 2: Channel Roles in a Dynamic Marketplace
Marketing ChannelsModule 2: Channel Roles in a Dynamic Marketplace @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. Channel Roles in a Dynamic Marketplace The principle of interspeciﬁc competition suggests that channel members must ﬁght to achieve competitive advantages. Three outcomes are possible: Competitive Superiority Restrictive Ranges Character Displacement
2.1 Channel Behaviors in Competitive Environments Interspeciﬁc Competition in Marketing Channels Business life, unlike life in the mythological jungle, is ﬁrst of all fundamentally cooperative. It is only within the bounds of mutually shared concerns that competition is possible.
2.1 Channel Behaviors in Competitive Environments Changing Environments: A Shared Concern Differential advantages emerge from an organization’s distinctive characteristics, if these properties set it apart from competitors in ways that prove enticing to customers.
2.1 Channel Behaviors in Competitive Environments Diversity in Complex Environments Environmental diversity refers to the variety of environmental forces facing a channel member.
2.2 Channel Roles in the Exchange System Three types of channel relationships exist: Supplier Relationships Customer Relationships Lateral Relationships
2.2 Channel Roles in the Exchange System Channel roles are the sets of activities or behaviors assigned to each intermediary in a channel system.
2.2 Channel Roles in the Exchange System Role identity speciﬁes the traits of an individual or organization that are considered appropriate to and consistent with the performance of a given channel role.
2.3 Supplier Relationships Wholesaler Classiﬁcation: Merchant wholesalers Manufacturer’s sales organizations (MSOs) Agents (also known as brokers) Commission merchants
2.4 Customer Relationships: Changing technology and trends more electronic shopping more mail-order catalog/direct mail more manufacturer’s outlets hypermarkets
2.5 Lateral Relationships Lateral relationships feature a sort of ‘co-opetition’ – note how the term blends cooperation with competition.
2.6 Establishing Channel Role Identities: SIFTing Process The overriding purpose of channels is to serve consumer and end-user needs.
2.6 Establishing Channel Role Identities: SIFTing Process Services Provision of value-added services. Innovation Introduction of new methods or technologies to strengthen exchange relationships within channels. Flexibility Ability to successfully accommodate exchange partners’ needs as environmental and process conditions change. Timing Timely delivery, a key component of channel efficiency, is a primary part of role identity.