MKT20023 MARKETING CHANNEL DESIGN AND INTEGRATION PREVIEW DETAILED COMPLETE EXAM REVISION NOTES

Transcription

1 2018 SEMESTER 1 MKT20023 MARKETING CHANNEL DESIGN AND INTEGRATION DETAILED COMPLETE EXAM REVISION NOTES Key Concepts Covered: Chapter 6 Channel Design Chapter 7 Selecting Channel Members Chapter 8 - Target Market and Channel Design Chapter 10 Product Issues in Channel Management Chapter 12 Promotion Chapter 13 Logistics and Channel Management Chapter 15 Electronic Marketing Channels Chapter 16 Franchise Marketing Channels SWINBURNE UNIVERSITY

2 Table of Contents Chapter 6 Channel Design... 2 Channel Members... 2 Who engages in channel design?... 2 Channel Design Paradigm... 2 Number of levels in channels... 2 Intensity at various levels... 3 Variables Affecting Channel Structure... 3 Chapter 7 Selecting Channel Members... 5 The Selection Process... 5 Sources to find channel members... 5 Selection Criteria... 5 Securing the prospective channel members... 5 Chapter 8 - Target Market and Channel Design... 6 Chapter 10 Product Issues in Channel Management... 7 Chapter 12 Promotion... 9 Pull Strategy... 9 Push Strategy... 9 Chapter 13 Logistics and Channel Management Role of Logistics Third Party Logistical Providers Key Interface Areas between Logistics & Channel Management Chapter 15 Electronic Marketing Channels Key Phenomena in the Structure of Electronic Marketing Channels Advantages and Disadvantages of Electronic Marketing Channels Chapter 16 Franchise Marketing Channels Summary Channel Management Implications of Franchise Channels Potential downsides to franchise channels Importance of Services Final Notes

3 Chapter 6 Channel Design Channel Members Member participants - negotiating functions - buying, selling, transferring titles - wholesaling, retailers, customers Ancillary structure (non-member/facilitating agencies - transport, finance, marketing) Definition: Channel design refers to decisions associated with developing new marketing channels where none had existed before, or to modifying existing channels. Distinguishing points of the definition include: A decision made by the marketer The creation or modification of channels The active allocation of distribution tasks in an attempt to develop an efficient structure The selection of channel members A strategic tool for gaining a differential advantage Who engages in channel design? 1. Firms (look down the channel) producers, manufacturers, service providers and franchisors 2. Wholesalers (look both up and down the channel) 3. Retailers (look up the channel to secure suppliers) Channel Design Paradigm 1. Recognize the need for channel design decision 2. Set & coordinate distribution objectives 3. Specify distribution tasks 4. Develop alternative 5. Evaluate relevant variables 6. Choose the best channel structure 7. Select channel members Number of levels in channels Range from 2 to 5 levels Alternatives is limited to 2 or 3 choices Limitations result from the following factors: Particular industry practices, Nature & size of the market, Availability of intermediaries 2

4 Intensity at various levels Definition: Intensity refers to the number of intermediaries at each level of the marketing channel. Ex. 1. Intensive - as many outlets as possible are used at each level of the channel. Ex. Convenience goods 2. Selective - not all possible intermediaries at a particular level are used, are ones that are carefully chosen. Ex. Shopping goods (Aldi) 3. Exclusive - very highly-selective pattern of distribution. In this case only one intermediary in a particular market area is used. Specialty goods often fit into this category. Ex. Designers Variables Affecting Channel Structure 1. Market Variables 2. Product Variables 3. Company Variables 4. Intermediary Variables 5. Environmental Variables 6. Behavioural Variables Market Variables (used to define target market): Geography - Refers to the geographical size of markets and their physical location and distance from the producer or manufacturer. Size - The number of customers making up a market (consumer or industrial) Density - The number of buying units (consumers or industrial firms) per unit of land area Behaviour - Refers to the following four types of buying behaviours: 1. How customers buy quantity, card/cash 2. When customers buy seasonality 3. Where customers buy online/instore 4. Who does the buying final consumer, buyer of the household, buyer of the present Product Variables: Bulk and weight 3

5 Perishability Unit value Degree of standardization (custom-made versus standardized) Technical versus nontechnical highly technical = short channel Newness new products need aggressive promotion Prestige Company Variables: Size In general, the range of options for different channel structures is a positive function of a firm s size. Financial Capacity Generally, the greater the capital available to a company, the lower is its dependence of intermediaries. Managerial Expertise Some firms lack the managerial skills necessary to perform distribution tasks. When this is the case, channel design must of necessity include the services of intermediaries, which may include wholesalers, manufacturers representatives, selling agents, brokers, or others. Objectives and Strategies Marketing, general objectives and strategies (such as desire to exercise a high degree of control over the product and its service) may limit the use of intermediaries Intermediary Variables: Availability - The availability of adequate intermediaries will influence channel structure. Cost- The cost of using intermediaries is always a consideration in choosing a channel structure. Services - This involves evaluating the services offered by particular intermediaries to see which ones can perform them most effectively at the lowest cost. Environmental Variables: 1. Economic 2. Sociocultural 3. Competitive 4. Technological 5. Legal Behavioural Variables: 1. Potential for conflict 2. Power 3. Roles 4. Communication 4