Designing & Managing Integrated Marketing Channel

Indrawati, PhD

Holistic Marketing Dimensions

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Marketing Channels

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Sets of interdependent organizations participating in the process of making a product or service available for use or consumption.

Sell value, not price.

Establish channels for different target markets and aim for efficiency, control, and adaptability.

Integrate retailers, wholesalers, and logistical organizations to deliver value successfully to customers.

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Pepsi Co.

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Pepsi Distribution Channels

Intermediaries

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Merchants

Agents

Facilitators

Importance of Channels

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Multichannel Marketing (Hybrid)

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Sales Force

Internet

Telemarketing

Direct Mail

Value Network and Marketing-Channel System

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IBMs sales force sells to large accounts, outbound telemarketing sells to medium-sized accounts, direct mail sells to small accounts, retailers sell to still smaller accounts, and the Internet to sell specialty items.

Charles Schwab enables its customers to do transactions in branch offices, over the phone, or via the Internet.

Channel integration characteristics

Ability to order a product online and pick it up at a convenient retail location.

Ability to return an online-ordered product to a nearby store.

Right to receive discounts based on total of online and off-line purchases

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Push & Pull Strategies

persuades consumers to demand the product from intermediaries

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low brand loyaltyhigh brand loyalty

induce intermediaries to carry, promote, and sell the product to end users

Push & Pull Strategies

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A push strategy uses the manufacturers resources to induce intermediaries to carry, promote, and sell the product to end users. A push strategy is appropriate when there is low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood.

In a pull strategy the manufacturer persuades consumers to demand the product from intermediaries, thus inducing the intermediaries to order it. Pull strategy is appropriate when there is high brand loyalty and high involvement in the category, when consumers are able to perceive differences between brands, and when they choose the brand before they go to the store.

Value Networks

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A value network is a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings.It includes a firms suppliers and its suppliers suppliers, and its immediate customers and their end customers, as well as relationships with others such as university researchers and government approval agencies.

Role of Marketing Channels

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ContactsExperienceSpecializationScale of operation

Facilitators

Merchants

Agents Companies use intermediaries when they lack the financial resources to carry out direct marketing, when direct marketing is not feasible, and when they can earn more by doing so. The most important functions performed by intermediaries are information, promotion, negotiation, ordering, financing, risk taking, physical possession, payment, and title.

Role of Marketing Channels

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Companies use intermediaries when they lack the financial resources to carry out direct marketing, when direct marketing is not feasible, and when they can earn more by doing so. The most important functions performed by intermediaries are information, promotion, negotiation, ordering, financing, risk taking, physical possession, payment, and title.

Channel Functions

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Transportation, communication

Ordering, payment

Forward Flow

Backward Flow

Information, negotiation, finance, risk taking

Channel Functions

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1. Gather information about potential and current customers, competitors, and others

2. Develop and disseminate persuasive communications to stimulate purchasing

3. Reach agreements on price and other terms so that transfer of ownership or possession can be effected

4. Place orders with manufacturers5. Acquire funds to finance inventories at different levels in the

marketing channel6. Assume risk connected with carrying out channel work7. Provide for the successive storage and movement of physical

products8. Provide for buyers payment of their bills through banks and other

financial institutions9. Oversee actual transfer of ownership from one organization or

person to another

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Marketing Flows in the Marketing Channel for Forklift Trucks

Channel Levels Consumer

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Zero-level (Direct marketing) channel

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home parties

Channel Levels B2B

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Designing a channel system

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1. Analyzing customer needs

2. Establishing channel objectives

3. Identifying major channel alternatives

4. Evaluating major channel alternatives

Analyzing customer needs

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Price

Product Assortment

Convenience

Shopping Goals Economic Social Experiential

Channels Service Outputs

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Lot Size

Waiting/Deliver Time

Product Variety

Service Backup

Spatial Convenience

it easy for customers to purchase the product

units the channel permits a typical customer to purchase on one occasion

Channel Alternatives

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Sales Force

Distributors Direct Mail

Telemarketing

Channel Alternatives Type of Intermediaries Number of

Intermediaries Terms and

Responsibilities

Number of Intermediaries

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Exclusive Distribution

Selective Distribution

Intensive Distribution

limits the number of intermediaries

only some of the intermediaries willing to carry a particular product

many outlets as possible

Evaluating Channel Alternatives

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Economic Criteria

$4.07(Face-to-Face Transaction)

$0.54(Phone Transaction)

$0.27(ATM Transaction)

$0.01(Online Transaction)

The Value-Adds versus Costs of Different Channels

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Channel-Management Decisions

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Selecting Channel Members

Training and Motivating

Channel Integration and Systems

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Vertical Marketing Systems

Horizontal Marketing Systems

Integrating Multichannel Marketing Systems

Disney

Blockbuster

Disney Store

Best Buy

.com

Amazon

two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity

includes the producer, wholesaler(s), and retailer(s) acting as a unified system

the strategies and tactics of selling through one channel reflect the strategies and tactics of selling through one or more other channels

Managing Channel Conflict

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Employee Exchange

Mediation

Dual Compensation

Levels of Retail Service

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Self service

Self selection

Limited service

Full service

Non store Retailing

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Direct selling

Direct marketing

Automatic vending

Buying service

Retailers Marketing Decisions

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Target market

Product assortment

Procurement

Prices

Services

Store atmosphere

Store activities

Store experiences

Communications

Location

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Store Atmosphere and Experiences

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Keep shoppers in the store

Honor the transition zone

Dont make them hunt

Make merchandise available to the reach and touch

Note that men do not ask questions

Remember women need space

Make checkout easy

Increasing Sales in Retail Space

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Selling and promoting

Buying and assortment building

Bulk breaking

Warehousing

Transportation

Financing

Risk bearing

Market information

Management services and counseling

Wholesaling Functions

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Terima kasih

Thank you

LINK

http://www.youtube.com/watch?v=Tb8bF2hCyLw = brian McCharty

http://www.youtube.com/watch?v=rqXIwjD3Cso = Pepsi co

http://www.youtube.com/watch?v=17JMFvMmT3w = Channel distribution explanation

http://www.youtube.com/watch?v=yZC4neLax5o = Wallmart supply chain

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LINK

Jobber is a person who is a wholesaler basically, but is providing limited services too like financing, delivery, shelving etc.

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