lecture 9 - place - distribution and channel Flashcards
what are marketing channels?
A channel of distribution is the path an organisation’s product takes including any necessary activities such an transforming and transporting inputs and the organisations involved to reach the target market.
a distribution channel is a ‘route to market’, the market being ‘where’ the target market may buy the product
any connection between buyers and sellers that allows or contributes to the occurrence of an exchange can be thought as a marketing channel
channels play roles throughout the customer journey
channels play roles through the journey the product makes on its route to market
what is Bucklin’s theory of distribution channel structure
A channel of distribution comprises a set of institutions which perform all the activities utilised to move a product and its title from production to consumption
what is the simple view of distribution
- raw & packing material suppliers
- factories/third-party manufacturing
- primary transport (freight-in)
- distribution center
- primary transport (freight-out)
- customer
what are channel partners?
intermediaries specialising in the distribution functions required to deliver value to the market
what are the channel partnerships?
sometimes called supply partnerships, are contractual and ongoing relationships between the supplier and intermediaries specifying the objectives, policies and procedures for facilitating the effective distribution of the supplier’s products
what are the primary categories of intermediaries?
this includes manufacturer (also called supplier), distributor (wholesaler) and retailer.
what are the functions of channel members
demand generation
supply fulfillment
what are the channel strategy elements
channel type
channel partners
channel structure
what are the variations of channel formats and lengths?
consumer marketing channels B2C
manufacturer - customer
manufacturer - retailer - customer
manufacturer - wholesaler - retailer - customer
manufacturer - wholesaler - retailer - dealer - customer
Industrial marketing channels B2B
manufacturer - customer
manufacturer - industrial distributors - customer
manufacturer - manufacturers representative - (industrial distributors) - customers
what is intense distribution?
Intensive distribution aims to provide saturation coverage of the market by using all available outlets. For many products, total sales are directly linked to the number of outlets used (e.g., coca cola, beer). Intensive distribution is usually required where customers have a range of acceptable brands to choose from. In other words, if one brand is not available, a customer will simply choose another.
This alternative involves all the possible outlets that can be used to distribute the product. For example, soft drinks where distribution is a key success factor. Here, soft drink firms distribute their brands through multiple outlets to ensure their easy availability to the customer.
Hence, on the one hand these brands are available in restaurants and five-star hotels and on the other hand they are also available through countless soft drink stalls, kiosks, corner shops, cafes, and so on.
what is selective distribution?
Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort on them. Selective distribution works best when consumers are prepared to “shop around” – in other words – they have a preference for a particular brand or price and will search out the outlets that supply.
This alternative is the middle path approach to distribution. Here, the firm selects some outlets to distribute its products. This alternative helps focus the selling effort of manufacturing firms on a few outlets rather than dissipating it over countless marginal ones.
what is exclusive distribution?
Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area.
When the firm distributes its brand through just one or two major outlets in the market, who exclusively deal in it and not all competing brands, it is said that the firm is using an exclusive distribution strategy. This is a common form of distribution in products and brands that seek a high prestigious image.
Typical examples are of designers, major domestic appliances and even cars. By granting exclusive distribution rights, the manufacturer hopes to have control over the intermediary’s price, promotion, credit inventory and service policies. The firm also hopes to get the benefit of aggressive selling by such outlets.
what are the types of sales channels?
single channel - customers experience a single type of touch-point.
Retailers have a single type of touch-point
multi-channel - customer sees multiple touch-points acting independently
retailers’ channel knowledge and operations exist in technical & functional silos
cross-channel - customer sees multiple touch-points as part of the same brand
retailers have a ‘single view of the customer’ but operate in functional silos
omni-channel - customers experience a brand, not a channel within a brand
retailers leverage their ‘single view of the customer’ in coordinated and strategic ways
what is the new landscape? (business model evolution)
traditional - customers shop at bricks and mortar stores
e-commerce - customers shop online via e-commerce websites
multi-channel - customers shop via multiple channels
omni-channel - customers engage anywhere via integrated, seamless experiences
what are the channels of distribution and last mile?
order anywhere
- connections
fulfillment anywhere
- truck
last-mile delivery
- self-pickup
- drones
- autonomous vehicles
- crowdsources delivery
what is the data about today’s digitally connected world users
90% of users switch between screens to complete tasks, using an average of 3 combinations every day
50% consumers regularly use more than four touch-points with a brand before purchase
87% customers think brands need to put more effort into providing a seamless experience
30% higher lifetime value for omnichannel shoppers than those who shop using only one channel
what is omni-channel marketing?
omnichannel marketing creates a continuum of customer touchpoints across mutliple channels that together provide an engaging brand experience
multichannel means that a brand is on key channels
omnichannel is an evolution of multichannel. Each channel is aware of interactions on other channels. The customer experience is seamless and consistent.
omnichannel is in the early stages of adoption, but offers compelling ROI for many companies
the omnichannel experience is quickly becoming what customers expect
what are examples of omni channel marketing
visits your retail store and looks at shoes
downloads your app
scans QR code and buys using your app to claim 25% discount
visits your website and looks at t-shirts but not buy
receives a push notification on her mobile about offers on t-shirts
clicks on the notification and lands on the app
How Oasis Enhances In-store Shopper Experience Using Digital Tools
Oasis is a U.K. fashion retailer that fuses their ecommerce site, mobile app, and brick-and-mortar stores into a simple shopping experience.
Sales associates armed with iPads.
Provide on-the-spot, accurate, and up-to- date product information.
Place instant orders for out-of-stock items delivered to shopper’s home.
Plus, shoppers can download Oasis’ app to supplement their in- store (or online) shopping experiences.
what is personalisation in terms of omnichannel marketing strategy?
Plays a vital role in developing an omnichannel marketing strategy
Consumers no longer accept the fact that brands have hundreds—if not thousands—of clients that they interact with daily. They expect a personalized one-on-one experience. The good news here is that, if you’ve already implemented proper marketing best practices, executing a personalised experience in your omnichannel marketing strategy will be seamless.
Remember, the goal is to provide the right message to the right person at the most opportune time.
how is starbucks an omnichannel marketing strategy?
Starbucks does a wonderful job of implementing their omnichannel marketing strategy with their Starbucks rewards program.
They utilize severaxl different marketing channels to help create a simple, unified experience for participants. This ensures that their loyal customers have access to their rewards points, no matter where they are, and can reach their accounts across several devices.
Channels included in their rewards program are:
Email
Mobile app
In-store
Online via their website
This is an excellent example of an omnichannel marketing strategy because users have plenty of options when it comes to accessing their personal information, locating shops near them, and adding money to their digital Starbucks cards.
If a user is on the go, their mobile app is excellent for finding shops or paying for a drink via your digital card with preloaded money. If you’re in store, cashiers can help you find out how much money is on your card or how many points you’ve earned toward your next reward. No matter where a member is, they can monitor their account and use their rewards with ease, thanks to the Starbucks omnichannel approach.
what is the new retail experience?
traditional mall
virtual mall
five-year average ROI
amazon. com (17%) vs discount & department stores (6.5%)
virtual mall
future store
