Lecture 13 - Marketing channel Management Flashcards
Push Strategy
Induce the intermediaries to push product
To induce
- Give a percentage of sales
-Heavy advertising
Pull Strategy
Induce consumers to ask intermediaries for the product
To induce:
-“coming soon, pre-order, Ask your doctor”
Why use distributors
- May not have resources to sell direct to end users
- May not have resources to achieve mass distribution - economies of scale
- Allows business to reinvest in own business
- Intermediaries offer experience and specialization
Channel Flows
Physical -
Ownership or Title
Payment
Information
Channel Design Decisions
- Analyze Customers Desired Service output levels
- Establish Channel Objectives
- Identify Major Channel Alternatives
- Evaluate major Channel Alternatives
Analyize Customers Desired Service output level
- Lot size - how many customers buy at a time
- Waiting time and delivery -
- Spatial convenience - convenient to buy
- Product variety -
- Service Backup
Establish Channel Objectives
Stated in terms of targeted services output levels
- Must choose which segments to service and the best channels for each
- Consider strengths and weakness of different types of distributors
Identify Major Channel Alternatives
- Types of distributors
- Numbers of distributors
- Terms and Responsibility of Distributors
Major Channel Alternatives: Number of distributors
- Exclusive distribution - Specialty
- Selective Distribution - Fewer distributors - like auto dealers
- Intensive Distribution - found everywhere - like Cocacola
Major channel alternatives: Terms and responsibilities of distributors
- Pricing policies - if you come in 2 days 10% off
- Payment terms
- Territories
- Mutual services
Evaluating major Channel Alternatives - Based on
- Economic Criteria - sales level met
- Control Criteria - How much control do you have?
- Adaptive Criteria -
Channel Member Decisions
Selecting
Training - so retailer will recommend your product because they know it
Motivating - who has power? Think Walmart
Evaluating - Complaints responsiveness
Modifying - add or change members
Channel Integration systems
Vertical integration - own channel members on different level - Tesla, Apple, Sony
Horizontal integration - own channel member on same level - Own the competition - Weston owns superstore and loblaws
VMS
Vertical marketing Systems
What are the Vertical Marketing systems?
- Corporate VMS - Distribution and production under one retailer
- Administered VMS
- Contractual VMS
