...KEY TERMS Marketing Channel (channel of distribution) a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user to consumer Channel members all parties in the marketing channel who negotiate with one another, but and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer Discrepancy of Quantity the difference between the amount of product produced and the amount an end user wants to buy Discrepancy of Assortment the lack of all the items a customer needs to receive full satisfaction from a product or products Temporal Discrepancy a situation that occurs when a product is produced but a customer is not ready to buy it Spatial Discrepancy the difference between the location of a producer and the location of widely scattered markets Retailer a channel intermediary that sells mainly to consumers Merchant Wholesaler an institution that buys goods from manufacturers and resells them to businesses, government agencies, and other wholesalers or retailers and that receives and takes title to goods, stores them in its own warehouses, and later ships them Agents and Brokers wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers Logistics the efficient and cost-effective forward and reserve...
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...MARKETING CHANNELS A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process. A marketing channel is a useful tool for management. An alternative term is distribution channel or 'route-to-market'. It is a 'path' or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them flow in the opposite direction (from consumer to the vendor). A marketing channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent) intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer Roles of marketing channel in marketing strategies -Links producers to buyers. -Performs sales, advertising and promotion. -Influences the firm's pricing strategy. -Affecting product strategy through branding, policies, willingness to stock. -Customizes profits, install, maintain, offer credit, etc. Coordinated Channel Marketing - Brands carry out online and offline advertising on behalf of channel partners to aid them in generating sales of their branded products. Those online...
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...distribution channels, let’s understand the two different types of channel levels which are direct and indirect distribution. In direct distribution the consumer product goes directly from the producer to the consumer without any diversions or deviation in the process. An example that was used in the text was that of Schwan Foods and how they deal directly with the consumer utilizing its internal sales departments or online ordering (Kerin, 2013). Then there is indirect distribution which involves other channels than just the consumer. There is also the agent, wholesaler and the retailer. An example of that is as follows. The auto industry sales directly to the retailers or dealerships, and the retailers deal with the public or consumer. A candy company on the other hand sells its products to a wholesaler warehouse company first which in turns sell to the retailers who deal with the consumers. Then there are companies like Mansar Products whom is a manufacturer that has agent who represent them. Those agents sell to the wholesalers who deal with retailers that deal with the public or consumer. With so many stages of distribution a company has to make up their mind which channels they will use to get their products in the hands of the consumer. This is all taken care of during the research and development stages of the marketing strategy. The process just explained is the conventional marketing system. There is a vertical, horizontal and multi-channel marketing system as...
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...IMC Exam 1. Imagine that ORANA wishes to enter a new national market. Explain what considerations ORANA should have, when choosing between, for example, Peru or New Zealand. Entering a new market is an important decision, so ORANA has to consider many aspects carefully before making the decision on which country to enter. According to the Market-based view a company which wishes to enter a new market has to consider market conditions of the nation. The theory states that the competitive advantage comes from the market itself and the external environment of the firm. The company has to find the market from where it can gain competitive advantage. For deciding on which market to enter, Porter five forces, as a framework for industry analysis can be a great help. This framework is very useful when it comes to business strategy development. Porter says that the nature and degree of competition depends on these five forces: threat of new entrants, bargaining power of customers, bargaining power of suppliers, threat of substitute products or services and the intensity of competitive rivalry (Porter, 1979). To enter into a new market, ORANA has to be aware of the current market situation and the state of the competition. The Danish manufacturer has to make a research on these five forces and get to know the more they can about the state of the competition. To get the proper information they have to make market research, going to the field or find a partner from Peru and New...
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...Case 11 Star Chemical Company Choosing Alternative Channel Structures Summary: The star chemical company is an old-line manufacturer of chemicals, experiencing a profit slump due to excess capacity and price competition. The company recently formulated a new line of chlorinated organic chemicals that can be used as a germicidal chemical for swimming pool market. They believe it would bring them an opportunity to enter the consumer market and seek the best distribution alternative. A. There are 4 major distribution alternatives available for Star Chemical Company. First, the company can sell the germicidal chemical to consumers directly. This would bring the company the highest profit since there is no middleman. However, it could cause a low inventory turnover since their own sales force does not have an experience in consumer market. What it means is that the company’s money can be tied up in inventory that makes no profit. Secondly, the company can sell the product to retailers directly without going through distributors and wholesalers. The company would still make relatively high profit due to elimination of intermediaries. There would be less pressure on raising consumer awareness of the product since retailers already gained consumers’ trust. One downside of this alternative would be the company may be required to do a lot of marketing activities to place more of their product on the shelves. Third, the company can sell the germicidal...
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...Ch10 Marketing Channels Supply Chinas and the Value Delivery Network Upstream: Supply raw materials, components, parts, information, finances, and expertise Downstream: Marketing channels towards customers, including wholesales and retailers, * Supply chain: make-and-sell view, which suggest productive inputs as starting point * Demand chain: Sense-and-respond view But sometimes it takes a step-by-step, linear view of purchase-production-consumption activities Value Delivery network: A network composed of company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system in delivering customer value The Nature and Importance of Marketing Channels Marketing Channel (Distribution channel): A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user * Affect every other marketing decision * Use imaginative distribution systems * Involve long-term commitment to other firms How Channel Members Add Value * Give up some control over how and to whom to sell products * But they create greater efficiency in making goods available to target markets by better contacts, experience, specialization and scale of operation * Intermediaries reduce the amount of work by both producers and consumers * Transform assortments of products made by producers...
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...[Type the company name] | Marketing channels | 81,105, 117, 93, 69 | | [Type the author name] | 9/21/2010 | Marketing channel: A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user Channel level: A layers of intermediaries that the perform some work in bringing the product and its ownership closer to the final buyer. Channel conflict: Disagreement among marketing channel members. Vertical marketing system :A distribution channel structure in which producer wholsers , and retailers act as a unified system one channel members owns the others ,has contracts with them or has so much power that they all cooperate Future vertical marketing system divided in to two .They are 1.conventional marketing system 2.vertical marketing system Vertical marketing system: A vertical marketing system comprises of the producer, wholesaler and retailer acting as a unified system. One channel member, the channel captain owns the members and has so much power that they all cooperate. It arose as a result of strong channel member’s attempts to control channel behaviour. There are three types of VMS: CORPORATE, ADMINISTERED AND CONTRACTUAL. CORPORATE VMS: A corporate VMS combines successive stages of production and distribution under single ownership. For example Sears obtains over 50% of the goods it sells from companies that it partly or wholly owns. ADMINISTERED VMS: ...
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...ignored health issues in Australia. Regardless of age, gender and physical condition, the increasing number of patients on bone disease namely Osteoporosis becomes a serious warning to general public on their bone healthy care. Healthy Bones Australia (HBA) is a program established by Osteoporosis Australia- a national not-for-profit organisation, which focuses on improving Australians’ bone health. 2. Nature of the marketing problem - Misunderstand and ignored by human natural instinct: General public has little knowledge about bones disease, low awareness on bone disease prevention and treatment, especially on age/gender concern. - Industry’s general environment: No outstanding campaign regarding to effectively educate Australians about the impacts of poor bone health. - To be more specific on the target market (Males, age 25 to 45): Males in this age range have few motivations or are lack of time to check their physical problems regularly; and as a result, it’s difficult to get their attention on bone health care. 3. Key marketing objectives - Increase the brand awareness of Healthy Bones Australia (HBA) among target market by 30% by the first 3 months of the campaign and by 10% each continuous quarter. - Improve the target market’s knowledge about and awareness on bone disease by 20% by the first 3 months of the campaign and by 10% each continuous quarter. - Being positioned in the top of...
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...Marketing Channel Strategy This page intentionally left blank Eighth Edition Marketing Channel Strategy Robert W. Palmatier University of Washington’s Foster School of Business Louis W. Stern Northwestern University’s Kellogg School of Management Adel I. El-Ansary University of North Florida’s Coggin College of Business Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editor in Chief: Stephanie Wall Acquisitions Editor: Mark Gaffney Program Manager Team Lead: Ashley Santora Program Manager: Jennifer M. Collins Director of Marketing: Maggie Moylen Executive Marketing Manager: Anne Fahlgren Project Manager Team Lead: Judy Leale Project Manager: Thomas Benfatti Operations Specialist: Nancy Maneri Cover Designer: Suzanne Behnke Creative Director: Jayne Conte Digital Production Project Manager: Lisa Rinaldi Full Service Vendor: Integra Software Services Pvt. Ltd. Full Service Project Manager: Anandakrishnan Natarajan/Integra Software Services Printer/Binder: Courier/Westford Cover Printer: Lehigh-Phoenix Text Font: 10/12, ITC Garamond Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text (or on page xix). Copyright © 2015 Pearson Education, Inc., publishing as Prentice...
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...Gaining market share in many market segments requires battling competitors on a daily basis to gain new customers and keep existing ones. The use of attack strategies needs to be part of a broader strategic market plan that looks at the inherent weaknesses of competitors in existing markets and emerging high growth opportunities in new market segments. The frontal, flank, encirclement, and bypass attacks are discussed in this paper as viable strategies for gaining market share while retaining existing customers. The last attack strategy of Guerilla warfare is also analyzed as a means to attaining a strategic market plan. The frontal attack is one that concentrates on attacking the fundamental aspects of a competitor’s marketing strategy. This includes attacking pricing, promotional programs, the product itself, and distribution strategies as well. The use of price as a differentiator by new market entrants is an example of a common frontal attack. Southwest Airlines’ use of low-price fares and free baggage when airlines today are beginning to charge for extra bags is an example of a front attack strategy. Linksys, the personal networking division of Cisco systems, also relies heavily on frontal attack strategies to gain access to new markets, including the higher-end enterprise networking market. Linksys also relies on their production efficiencies learned from serving the low-end of the wireless market to gain cost and price advantages in the enterprise networking markets...
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...with superstar athletes, pro sports teams as well as with college sports, so Nike relies mainly the ability to endorse and sponsor to be able to promote on its own. In 2008, Nike spent over $260 million on sponsorships and endorsing the brand. Nike Corporation provides creative advertisement deals with cricket teams in India well as providing sponsorship deals with Manchester Unite soccer team and soccer teams in other countries in Brazil and Portugal. Nike utilizes sponsorships deals to allow the Nike “Just Do It” logo to be displayed on each uniform as well as being on the inside of stadiums and arenas across the world, which continues to promote visibility of their products. Nike’s distribution channels and retail model Nike distributes its products through three major channels: By selling products to wholesalers in the US and international markets By direct-to-consumer(or DTC) sales, which include in line and factory retail outlets and e-commerce sales through www.nike.com Sales to global brand divisions.NIKE, Inc.has also tried to create category-specific retail destinations by partnering with footwear retailers such as Foot Locker, Inc., JD Sports, and Intersport. NIKE’s sales mix and retail slant Sales to wholesalers are the largest revenue category. However, this category’s contribution in the sales mix contracted from 83.3% in fiscal year 2012 to 79.2% of revenues in fiscal year 2014. DTC sales, on the other hand, increased from 16.2% to 20.3% over the same period...
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.... ORANA uses both its own sales staff and independent distributors to increase retail sales in Vietnam. Discuss the advantages and disadvantages of this strategy. ORANA realized the huge opportunity in covering new market areas due to the increasing demand in Vietnam as an emerging market, many indications showed that annual sales has a potential growth rate of around 20%, due to the increasing purchasing power, the middle class is growing, and people are willing to try new products. Therefore ORANA wanted to take the opportunity of being a fast mover and expanded its distribution from Ho Chi Minh City (Saigon), to the central and northern parts of Vietnam, by starting direct sales through independent distributors instead of relying only on own sales staff. Advantages: - Increase market coverage: By penetrating new geographical areas, ORANA makes it easy for customers to find the product, to achieve spatial convenience and easy availability which is important for retailer sales, these convenient goods are for everyday use, and buyers will take what is on offer rather than search for favorite brand. - Reduce liability of foreignness: National distributers are likely to have advantages over ORANA’s own sales staff, because they have important information and critical knowledge about their country’s: * Culture: A minimum of 9 different ethnic groups, with the majority of 86% Vietnamese, concentrated in center and northern parts (Map 3.1), a local expertise is required...
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...This paper will try to analyse and synthesize four article journals around the scope of marketing channel with social media. Analysis and recommendation to the problems identified about brand loyalty will be discussed after presentation and summary for all the journal articles. Jay M. Bernhardt Darren Mays Amanda K. Hall, (2012),"Social marketing at the right place and right timewith new media", Journal of Social Marketing, Vol. 2 Iss 2 pp. 130 - 137. This journal article is set to find out the effect of new media in social marketing. This paper is to seek to discuss how the new media revolution can improve social marketing by bringing the “place” closer to the consumer. The study utilised the authors viewpoint and arguments in understanding the impact that the social media brings to consumer and business owner in terms of bringing them closer together. No empirical methodology is used to present their arguments. The findings from this journal is that the rapid growth of social media and the massive use of mobile phones will give social marketers and advantage in engaging with the customers in a radical new way. This type of marketing channel is effective in relationship marketing and is potential in getting high volume of consumer-business owner engagement. In term of place, it brought them together in real time interactions. The authors suggested that social media has bring positive impact in consumer-business owner relationship. Not long ago, consumer may not be able to...
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...Fashion Channel Case Write Up Summary Beginning in the year 2006, the fashion channel has suffered from fierce competition from other channels, which are non-dedicated fashion networks. Both the viewership and the revenue increase were dropped down sharply. Actions need to be taken immediately to drive the company back on track. There were at least two impediments lying ahead, like the TFC did not know well in viewer’s interest, awareness, perceived value, it may cause the loss of the viewers, and there was no program that would distinguish the TFC from other competitors – show time & show content. By increasing the TFC’s advertising and rating, we will maintain the current avid viewers and focusing on Fashionistas and Planners & Shoppers, ages ranged from 18-34, female. Getting close to the Focus group by knowing viewers well, to increase their satisfaction, together with developing a Trump Show, Tailor-made programs, and inviting Opinion leaders to increase the rating and attracting more advertisers to make revenue. Goal The Fashion channel was founded in the year 1996, who was a successful cable TV network and the only network dedicated solely to fashion by up-to-date and entertaining features and information broadcast 24 hours per day, 7 days per week. It had experienced constant revenue and profit growth above the industry average almost since the beginning. The channel was also one of the most widely available niche networks, which gave the channel a competitive...
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...he third marketing mix tool is of importance since the success of a company depends not only on its own performance, but also on the total value chain, including the inbound, outbound and reverse (returning faulty products for example) distribution performance. Two remarks: good distribution strategies contribute strongly to create customer value companies or brands rarely compete with each other; their entire value delivery networks do ! Marketing channels: what and why? We distinguish upstream and downstream partners of a company: Upstream partners are the parties involved from the supplier of raw material, equipments, information, finance, components and expertise usually known as the supply chain to the company. Downstream partners traditionally consist of all parties involved that are in between the company and the customer, traditionally known as distributors (or wholesaler and retailer) to the customer This is however a “make-and-sell approach”. Better is to consider a “sense- and-response” approach involving all parties organized in a system (the value delivery network) in order to improve the entire system performance. Marketing Channels are thus a set of interdependent organizations that help make the product or service available for consumption or use by the final consumer or the business user. Market channel decisions: - affect the other mix decisions (product positioning, branding, price setting, sales force role, communications etc.) -...
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