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MANAGEMENT OF
DISTRIBUTION
Fall 2011/2012
Instructor: Miss. Aisha Tarek Noour
Chapter One
INTRODUCTION TO MARKETING CHANNELS
1th Lecture
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COMPONENTS OF
STRATEGIC MARKETING
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MarketingChannels
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THE NATURE MARKETING
CHANNELMarketing Channel
A group of individuals and organizations directing products fromproducers to
customers.
DistributionThe activities that make products available to customers when and wherethey want to purchase them
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IN SHORT DISTRIBUTION
The linkages ofproducersandusers.
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THE NATURE OFMARKETING CHANNELS
(CONTD) Marketing Intermediary
[Middleman or Intermediaries]
A middleman linkingproducers to other middlemenor to ultimate consumersthrough contractual arrangementsor through the purchase and resale ofproducts
create value by reducing the spatial separationthe physical distance between thepoint of production and point of consumptionbetween manufacturers and
ultimate users of products or services.
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Producer
ProducerProducer
Producer
ProducerProducer
Customer
CustomerCustomer
Customer
CustomerCustomerIntermediary
IntermediaryIntermediary
Direct ChannelDirect Channel
Indirect ChannelIndirect Channel
Producer
ProducerProducer
Producer
ProducerProducer
Customer
CustomerCustomer
Customer
CustomerCustomerIntermediary
IntermediaryIntermediary
Producer
ProducerProducer
Producer
ProducerProducer
Customer
CustomerCustomer
Customer
CustomerCustomerIntermediary
IntermediaryIntermediary
Direct ChannelDirect Channel
Indirect ChannelIndirect Channel
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These middlemen, in turn,
1) Perform a variety of distribution tasks to
moveproductsto end users:2) Gathering and sharing information;
3) buying and selling different product
assortments (W/D);4) Grading, storing, and transporting products;
5) Providing financing;
6) And taking market risk
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Miss. Aisha Tarek Noour 7Slide 15-8
Types of Intermediaries
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Retailers
Wholesalers
Brokers
Andagents
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THE NATURE OF MARKETING CHANNELSWHY CHANNELS AND INTERMEDIARIES?
1) Create Exchange Utility (service) through Customer Value
Value created by intermediaries: efficiency via
reducing the number of sales contacts necessary to reachthe target market
Four Components:
Form Utility
Place Utility
Possession Utility
Time Utility
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THE NATURE OF MARKETINGCHANNELS (CONTD)
WHY CHA NNELS A ND
INTERMEDIA RIES?
Marketing Channels Create UtilityTime utility: have products availablewhenthe customer wants them
(newspaper delivery). when the customers want to purchase the product.
Place utility:making products available in locationswherethe customerswish to purchase them (convenience stores). where the customers want topurchase the product.
Possession utility:the customer has accessto the product to useor to store for future use (raincoats). facilitates customer ownership ofthe product.
Form utility:Sometimes, if changes have been made to the product in thedistribution channel, i.e. Pepsi/Coke, concentrate to bottlers.
2) Maintaining Customer Relationships
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MA R K ETIN G C H A N N EL S A C T A S
EXCHANG E FACIL ITATORS
Therefore we define a Marketing Channel as exchangerelationships
that create customer valuein the acquisition,consumption and disposition of products and services
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W HYTH E GR OWIN G IMP OR TA N C E
O F M A R K E T I N G C H A N N E L S ?
1. The emerging of information technology and E-commerce
2. A greater difficulty in gaining a sustainable competitive advantage
3. The growing power of distributors, especially retailers in
marketing, channels
4. The need to reduce distribution costs
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DISINTERMEDIATION
cutting out the middleman
Instead of going through traditionaldistribution channels, which hadsome type ofintermediate (such asa distributor, wholesaler, broker, oragent.
Companiesmay now deal with every
customer directly, for example viathe Internet. One important factor isa drop in the cost of servicingcustomers directly.
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W H I L E T E R M S S U C H A S
R E S T R U C T U R I N G , F L A T T E N I N G O U T , D O W N S I Z I N G , A N D R I G H T S I Z I N G
H AV E U S U A L L Y B E E N M E N T I O N E D I N T H EC O N T E X T O F C O R P O R A T E
O R G A N I Z A TI O N S , T H E Y A L S O A P P L Y T O
M A R K E T I N G C H A N N E L S .T H E L AT E S T T E R M . . . .
Disintermediation
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A competitive advantage that
cannot be quickly and easily
copied by competitors
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*Channel Strategy is Long Term
*Requires a Channel Structure
*Depends on Relationships and People
*Requires Effective Interorganizational
Management
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Retailers
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Retailers Act as Buying Agents for
Customers Rather than as SellingAgents for Suppliers
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D ISTR IBU TION C OSTS OFTEN AC C OU N T FOR ASIG N IFIC AN T PE R C EN TAG E OF THE FIN AL PR IC E
OF PR OD U C TS
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Sometimes Distribution Costs
are Higher than the Manufacturing
Cost or the Costs of RawMaterials and Component Parts
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SOME EXAMPLES...
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Autos Software Gasoline Fax Machines Packaged Foods
Distribution
Manufacturing
Raw Materials
and
Components
15%
40%
45%
25%
65%
10%
28%
19%
53%
30%
30%
40%
41%
33%
26%
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WHO IS A CHANNEL
MANAGER?
Anyone in a firm or organization who is involved in marketing channel decision
making
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To be fully effective and efficientand to
command customer satisfaction and loyalty,
channels require leadership, cooperation, andmanagement of all relationships.
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Customer satisfaction + Customer loyalty=
Leadership +Cooperation and management of all relationship
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CUSTOMERS, ROSENBLOOM (1995,
1999) LISTS SEVEN
CRITICAL ACTIVITIES ACHANNEL MANAGER
PERFORMS:1) Formulating marketing channel strategy
2) Designing marketing channels3) Selecting channel members4) Motivating channel members5) Coordinating channel strategy withmembers6) Evaluating channel member performance7) Managing conflict in the channels
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T H E C H A N GE O F F O C U S TO
C H A N N E L S T R A T E G Y
Creates competitive advantage with long-term viability
Builds strongrelationships between manufacturers and channelmembers
Based on trust, confidence, and people power
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VALUE DELIVERY
NETWORK
Company, suppliers, distributors and customerswho partner to
improve system performance
A demand chain orientation: start with the needs of customers
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Factor Merchant
Wholesalers
Agents/Brok
ers
Nature of product Standard Nonstandard,
custom
Technicality ofproduct
Complex Simple
Products gross
margin
High Low
Frequency ofordering
Frequent Infrequent
Time between order
and receipt ofshipment
Shorter lead time Longer lead time
Number of customers Many Few
Concentration of
customers
Dispersed
(isolated)
Concentrated
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Those Business activities involved in the sale of goods and services to
consumers for
Personal family
or
Household use.
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CHANNEL
CONSIDERATIONS
*Types of Intermediaries
Company Sales Force, Manufacturers Agents, and Industrial
Distributors
*Number of Intermediaries
Intensive distribution: Snickers
Exclusive distribution: Rolls
Selective distribution: Acura
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THE LEVEL OF
MARKETING COVERAGE:
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Intensive
Exclusive
Selective
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EXCLUSIVE CHANNEL
Exclusive is operation to market own in which is only wholesaler in
market area with manufacturers goods and services.
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EXCLUSIVE CHANNEL
It consists of no more than one to two dealers market all products.
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EXCLUSIVE CHANNEL
It means one outlet in a relatively large area.
Products purchased infrequently, last a long time and require serviceand used as an incentive to sellers plus no one to undercut them.
(Place Utility).
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Manufacturer
Wholesaler Wholesaler
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INTENSIVE CHANNEL
Goods and services offered to all channel members meeting credit
standards. Products sold wherever possible.
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INTENSIVE CHANNEL
This means all available outlets are chosen for maximum exposure
(within reasons that a consumer would purchase that type of product.
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INTENSIVE CHANNEL
For example, Timex sells through 45,000 drug stores and thousands
of other stores. It used for convenience products, especially when
sales have a direct relationship to availability. It is available more
important than the nature of the outlet, for example, gas station vs.
convenience store.
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INTENSIVE CHANNEL
Convenience products have a high replacement rate and require no
servicing, for instant, P&G rely on intensive distribution in such as,
good for consumer package goods and place utility and it
manufacturer promotional support.
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H ER E IS TH E C OMP A R IS ON B ETWEEN
D I F F E R E N T L E V E L S O F D I S T R I B U T I O N
I N T EN SI T Y: -Intensity Level Objectives Number of Intermediaries
ntensive Achieving mass marketselling. Conveniencegoods.
Many
Selective Working with the selectiveintermediaries. Special
goods.
Several
xclusive Working with singleintermediary. Specialtygoods and industrial
equipment.
One
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EXCLUSIVE CHANNEL
Moreover, it allows for the highest control and easier to get retailers
to the carry a complete inventory and to provide service and repair
facilities.
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EXCLUSIVE CHANNEL
In this exclusive distribution may be used to introduce new products,
and then change when market is more competitive (Move from
introductionto the growthstage of the product life cycle.
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Manufacturer
Wholesaler
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SELECTIVE CHANNEL
Moderate number of wholesalers used in each market area. It
consists of a few number of dealers market all products.
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SELECTIVE CHANNEL
Only some available outlets (usually geographic) are chosen. Typically
shopping products.
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SELECTIVE CHANNEL
Buyers prefer to spend time searching. In selective distribution
customer service important and producers have more control.
Moreover, it motivate and promotional retailer support.
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Information needs are high,
Customization is important,Quality assurance matters,
Purchase orders are large,
And transportation and storage are complex.
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One-stop shopping for many products is important,
Availability is important,And after-sales service is important.
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TYPICAL MARKETING
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TYPICAL MARKETINGCHANNELS FOR
CONSUMER PRODUCTS
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DUAL DISTRIBUTION
Occurs when an organization distributes its product through two
or more different types of marketing channelswhich
typically compete for the same target market.
May cause conflict with channel intermediaries
Dual distribution more than one channel
* GE to consumers via retail stores; to builders
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MULTI-LEVEL
MARKETING
Avon, Mary Kay,Tupperware, sony, etc
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NUMBER OF CHANNEL
LEVELS
Channel Level - Each Layer of Marketing Intermediaries thatPerform Some Work in Bringing the Product and its OwnershipCloser to the Final Buyer.
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Number of Channel Levels
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Wholesaler Jobber Retailer Consumer
Consumer
Retailer Consumer
Producer
0-level channelDirect
Wholesaler Retailer Consumer Producer
2-level channel
Producer
3-level channel
1-level channel
Producer
Number of Channel LevelsChannel Level - Each Layer of Marketing Intermediaries that Perform
Some Work in Bringing the Product and its Ownership Closer to the Final
Buyer.
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FAC TOR S TO C ON S ID ER WHENSEL EC TIN G SPEC IFIC
IN TER M ED IAR IES
The producer will want to useintermediaries who:
1) Reach their target market2) Have agood reputation3) Handle distributionfunctions efficiently4) Order large quantities5) Pay invoices quickly6) Display andpromotemerchandise well
7) Have agood location8) Professional salespeople
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Fall 2011-2012
Miss. Aisha Tarek Noour
Third Lecture
Instructor: Miss. Aisha Tarek Noour
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THE EXTERNAL MACRO
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THE EXTERNAL MACRO-ENVIRONMENT
The external environmentis changing veryquickly, with great implicationsfor marketing macroforces are factors over which the company has no short-
term controlmicro
forces are those that operate at thefirm level the external macro-environment affectsdifferent firms at a different pace and in different ways thebetter we understand the changing marketing environmentand its effects, the better we can develop effective marketing programs
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CHANNEL
ENVIRONMENT
Overview of the channel EnvironmentThe Channel environment facing manufacturers, wholesalers, and retailers consists of
1) Customer Demographic
2) Consumer Life-style
3) Channel Competition
4) The Economy
5) The Legal issues
6) And Technology
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BUILDING SCENARIOS
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BUILDING SCENARIOSAND DEVELOPING A
CONTINGENCY PLANScenario:-Is a explanation of apossible future event or level of an activity that is likely to occur in future.[ Developing scenarios, a channel member increaseshis or her awareness of key opportunities, critical risk, and decision
alternatives.]
WITHOUR A SCENARIO These managers may not haveconsidered these opportunities, risks, andalternative strategies.
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BUILDING SCENARIOS
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BUILDING SCENARIOSAND DEVELOPING A
CONTINGENCY PLAN
Scenario buildingshould be limited to those events that are very
likely to occur and /or that would have a major impact (either
opportunity or threat) on the company.
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INCOME DISTRIBUTION
Despite overall favorable income trends, there has been a widening
gap between the poorest and the wealthiest people in Egypt, USA
etc...
Income can be measured on the basic of MONEY INCOME (actual
dollar/ Egyptian pound Income) And REAL INCOME (Income that
reflects the cost of living).
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Retailers must also consider the elderly in terms of making access
to shopping areas earlier through wide aisles forwheelchairsand
motorized carts and elimination of steps) using large print for in-
store signs hiring older salespersons, training younger employees
to become more sensitive, promoting telephone and mail order
sales, providing home delivery, using early bird specials.
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NUMBER OF HOUSEHOLD
Consists of a person or group of persons occupying a home units.
(FAMILY)
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MATERIAL STATUS
Married/ Couples.
Single/ Children
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WORKING WOMEN
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VALUE ORIENTATION
The right combination of product quality,
fair price, and good service.
It means giving more: an improved product,
with added features and enhanced services
all at a better price.
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BLURRING OF GENDER
ROLES
It refers to the broadening of
typical household duties between
male and female heads of
households.
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COMPONENT LIFESTYLES
Consumer attitudes and behavior vary by purchase situation: thus
typecasting or stereotyping people may not be particularly valid.
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3) CHANNEL COMPETITION
It describes the nature of channel competition among
channel members both at the same stage and at
different stages of distribution.
Channel competition takes one of four forms:1) Horizontal.
2) Intertype.
3) Vertical.
4) Vertical Marketing System.
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CONFLICT AND CONTROL
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IN CHANNELS
Channel conflictexists when channel members interfere with each others objectives.
Horizontal conflictinvolves firms on same level-- grocery store vs. drug store.
Vertical conflictinvolves firms at different levels
producer versus wholesaler
producer versus retailer
Channel Poweris the ability to influence or determine behaviour of others in channel.
Based on expertise, rewards and sanctions.
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HORIZONTAL
COMPETITIONIt consists of competition among channel members of the same type,
Such asBloomingdales and Dillards
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Department Store Department Store
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INTERTYPE COMPETITION
It relates to competition among different types of channel
members at the same level within a channel.
Such as, a full service wholesaler may compete with a limitedservice wholesaler.
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Full-Service Wholesaler Limited Service Wholesaler
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VERTICAL COMPETITIONIt describes competition among different channel
members at different levels within the channels.
Such as manufacturer competing with a retailer.
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Manufacturer
Wholesaler
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VERTICAL MARKETING
SYSTEM COMPETITIONHorizontal coordinated and verticallyaligned establishments that are professionallymanaged and centrally coordinated compete against each other.
Such as, Sherwin Williams performs manufacturing, wholesaling, and retailing functions.
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HORIZONTAL
COMPETITIONIt can be a department store versus a department store.
A full-service wholesaler versus another full-service wholesaler.
Manufacturer versus a manufacturer.
Horizontal competition also results in a more consistent image, more
comparable customer service, and possibly less price competition
among resellers( owing it the similar cost structures of each channel
member).
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INTERTYPE COMPETITIONIntertype competition involves new channel formats that are competing against traditional
formats or competition between price and service-oriented channel members.
Manufacturers often sell their goods and services through different channel members to
maximize sales.
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VERTICAL COMPETITIONIt can be forward or backward vertical integration.
FORWARD VERTICAL INTEGRATION
Manufacturers acquire a build up retail channels or wholesalers acquire or develop retail channels.
BACKWARD VERTICAL INTEGRATION
Retailers purchase or develop wholesale operations, wholesalers acquire or build manufacturingoperations, or retailers purchase or develop manufacturing operations.
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CHANNEL MEMBERS
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PERFORM A NUMBER OF
KEY FUNCTIONS:
*Forward flow functions:
Develop / distribute communication
Store and move the physical products
Oversee transfer of ownership
*Backward flow functions:
Place orders with manufacturers
Facilitate payment of bills
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O HER KEY FUNC IONSPERFORMED BY CHANNEL
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PERFORMED BY CHANNEL
MEMBERS INCLUDE THOSE
THAT FLOW BOTH WAYS:
*Forward and backward flow functions:
Gather information
Negotiate price and transfer of ownershipFinance inventories
Assume risk
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VERTICAL MARKETING
SYSTEM COMPETITIONA Situation in which horizontally coordinated and vertically aligned establishments thatare professionally managed and centrally coordinated compete against each other.
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4) ECONOMIC CHANGE
Consider the effect on consumers of:recession (business cycle)
changes in interest rates
inflation
unemployment
how are consumers likely to respond?they often shop around more; store and brand loyaltysuffer when consumers are uncertain
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5) LEGAL ISSUESLegal issues:Dual distribution:not illegal yet anti-competitive
Vertical integration:not illegal; under Clayton Act
if itlessens competition- tying arrangements- exclusive dealings- refusal to deal- resale restrictionsGrey markets
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5) POLITICAL AND LEGAL
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CHANGE
Government and laws affect marketing at manylevels legislation often has implications formarketing; some more direct than others
considerable amount of consumer protectionlegislation in effect in Canada many industries aredirectly affected by legislation; packaging,
labelling, advertising
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6) TECHNOLOGICAL CHANGE
advancing technology creates new forms of competition and communications; fax,
ATMs, CD-ROM, cellular, Internet
Also creates new industries to be supplied
Also has important effects on how people spend their time: working and shopping
from home, voice mail, surfing the Net Think about the fact that today technology is
accepted by consumers, expected by them, transparent to them, and often disposable
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IMPACT OF
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TECHNOLOGICAL CHANGE
launches entirely new industries, such as multimedia, digital communications andelectronic commerce
change or nearly wipe out existing industries, such as the effect of e-mail on regular mail
and even fax
motivate other markets and industries, such as the effect of the debit card and Internet
shopping on the retailing industry
Over 40% of Canadians had Internet access in 1999
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THE EXTERNAL
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MICROENVIRONMENT
External to the firm, but part of its marketing system because of its close relationship
its market; the people or organizationswhose wants and needs the firm intends to
satisfy
its suppliers;the other firms upon whom the firm relies toprovide quality products
and servicesso that it can serve its customers
marketing intermediaries;other firms that represent the channel of distribution
for the firms products and services
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The Companys
M k i P
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COMPANYSMARKETING
PROGRAM
SuppliersMarketinginter-mediaries
Marketinginter-mediaries
Themarket
Marketing Program
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Channel intermediaryneeds to reexamine
its current channel design under several
conditions.
The channel designsneed to be reevaluated prior to a merger oacquisition since both firms can have different channel structuresor channel structure that
overlap.
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1) Afirm must also evaluateits channel structure, whenever it
undertakes a major change in its marketing strategysuch as the
development of new product or a focus on a new target market.
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FOR EXAMPLE
Xeroxrecently began to sell an inexpensivecopier aimed at thesmall office/home office market, it had to revise its channel strategy
which successfully sold larger copiers through sales representativesvisiting larger offices.
Xerox continues to use its sales representatives to sell its largercopiers, but it now sells smaller machines through office supplychains, home electronics retailers and buying clubs.
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FOR EXAMPLE
A firm with a domestic market strategy generally cannot successfully
export goods to foreign markets without the assistance of a foreign
export specialist.
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3) A firm also need to reevaluate its current strategy as a result of
A) The loss of a major client,
B) An increase in gray market activities,
C) Changes in the importance of new channels,
D) Changes in buyer behavior.
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FIRST
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DETERMINING CHANNEL
OBJECTIVES
Typical objectives for a channel member can be to successfully
integrate the channel coverage.
1) To secure widespread distributionin a particular channel such as
supermarket.
2) To reduce salesby unauthorized dealers or to increase distribution for
a product to new markets while keeping investment requirements to a
minimum level.
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Specific channel objectivescan be determined by identifying a customersdistribution needs based on an examination of the service outputrequirements of its target customers.
To the extent thatproducers and end usersare unable to perform theseservice outputsor cannot perform these outputs efficiently,intermediaries are needed.
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REQUIREMENTS MAY BE
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GROUPED INTO FIVE
CATEGORIESLot sizeMarket decentralization
Waiting time
Product variety
Service backup
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LOT SIZE
Describes the consumer desire to purchase a product in small
quantities.
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MARKET
DECENTRALIZATION
Concerns the importance of convenient location.
Although some customers may travel a long distance for a product,
others want accessible retailers.
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WAITING TIME
Reports on delivery speed.
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PRODUCT VARIETY
Measuring the need to see competing brands and products.
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SERVICE BACKUP
Assesses the importance of having a product repaired in home or in
office.
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Channel objectivescan relate to improvement in any of the service
outputs.
A firmcan also segment a market based on differences in needs of
different customer groups.
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SECOND
ASSESSING CHANNEL WIDTHAN DEPTH AND
TYPES OF INTERMEDIARYREQUIREMENT
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A channels service output specifications directly affect the channels
length and depth.
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THERE ARE TWO MAJORT A
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ELEMENTS OF CHANNEL
DESIGN ARE
Channel Length
Channel Width
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Channel length requirements:Specify the number of the channel levelsthat are required to fulfill a suppliers objectives.
Channel width requirements:specify the number of intermediariesthat are needed at each level in the channel.
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CHANNEL LENGTH
The alternatives for channel length range from
1) direct distribution( with two levels; a manufacturer and a final
consumers).
2) Indirect distribution ( with five levels ( product sold through a
manufacturer to an exporter to a wholesaler to a retailer and
then to a final consumer).
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LONG CHANNEL
(INDIRECT CHANNEL)
Required limitedfinancialrecourses,
They provide a supplier with a low
degreeof control over the
distributionprocess.
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SHORT CHANNEL
Usually short channel are often used them with large over all sales.
And also associated with products in the early stages of a product
life cyclebecause of the need for highly trained employees to explain
a products features and to handle complex installations.
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SHORT CHANNELShort channels enable a manufacturer to have maximum channel control.
Short channels recognize that it is easier to control your own employeesthat the
employees of an independent distributors, retailers and even franchisees.
Consumers prefer dealing directly with a manufacturer especially when a product is
complexand must be customized to the individual customers needs.
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THE DISADVANTAGES
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THE DISADVANTAGES
OF SHORT CHANNEL
A manufacturer have sufficient capital to conduct all channel
activities and that a manufacturer have sufficient knowledgeand
the additional human resources to conduct these activities
efficiently.
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LONG CHANNEL
Each independent channel members ( manufacturers, wholesalers,
retailers) takes pm specified channel responsibilities.
A long channel indicates that a relatively large number of independent
firms are involved in the channel arrangement.
Long channels are generally associated with high channel
specification and with wide geographical coverage.
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Long channels give he user the ability to distribute to
1) a large number of customers, reduce financial requirements
for manufacturers,
2) allocate channel member responsibilities among channel members,
3) and enable consumers to purchase a large proportion of their
needs from one source.
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A long channel reduces the financial and human resource
requirements of each retailer, for other channel members would now
undertake warehousing, shipping, credit and field selling activities.
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THE DISADVANTAGES OF
LONG CHANNEL
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LONG CHANNEL
More intermediaries involved in getting a suppliers product to
market, the less control supplier can generally exerciseover the
products flow and transportation.
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INTERMEDIARIES AT
EACH LEVEL IN A
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EACH LEVEL IN A
CHANNEL
There are three types of competitive environment are horizontal,
intertypes and vertical competition.
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EVALUATING MARKET/
PRODUCT/ MANUFACTURER/
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PRODUCT/ MANUFACTURER/
INTERMEDIARY/ FACTORSTHAT AFFECT CHANNEL
LENGTH
This section studies market, product, manufacturer and intermediary factors
that affect a channels length
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REFLECT A PRODUCT
POSITIONING ON THE
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POSITIONING ON THE
BASIS OF
1) Replacement rate
2) Gross margin
3) Adjustment
4) Time of consumptionMiss aisha tarek noour 135
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Replacement rate:-
The rate at which a product is purchased by users.
Gross margin:-
The total channel costs measured by the difference
between product costs and the final selling price for
a goods.
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Time of consumption
The time period during which the product is used. In general, goods
with low time of consumption are likely t have a high replacement
rate. However, some products such as aspirin have a short time of
consumption but a long replacement rate.
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Searching time
The amount of effort expended by customers to shop for a particular
good. Search time is measured by the travel time and distance
consumers will travel to shop for a given product.
All product is classified on three degree to which they possess these
factors.
Red goods/ Orange goods/ and yellow goods
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MARKET FACTORS
Size of customer base
Geographic dispersion
Customer density
Sales gestation period
Level of customer
Average order size
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PRODUCT FACTORS
Bulk
Perishability
Unit value
Product standardization
Technical nature
Gross margin
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MANUFACTURER
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MANUFACTURER
FACTORS
Size
Financial capability
Desire for control
Managerial expertise
Customer Knowledge
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INTERMEDIARY FACTOR
Availability
Cost
Quality
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THESE ARE TASKS ARE
ORGANIZED BY
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O G N
ACTIVITIESSelling
Channel support
Physical distribution
Product Modification and After sale service
Risk Assumption
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RESPONSIBILITIES
AMONG THE CHANNEL
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PARTICIPANTS
The responsibilities among channel members
1) Reducing distribution
2) Maximizing market share, sales revenue, and
profit.
3) Optimizing the return on distribution-specific
investment risks
4) Meeting customer needs for product technicalMiss aisha tarek noour 145
SELECTION OF
SPECIFIC CHANNEL
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RESELLERThis section is divided into three main parts: determining the
availability of channel resellers, evaluating resellers on a
preliminary basis, and conducting a
comprehensive analysis of resellers.
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SIXTH
REVISING CHANNEL
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ARRANGEMENTChannel decisions are of a long term nature they should not beviewed as unchangeable. To be effective, a channel system needs toreflect changes in consumer behavior, the relative importance ofspecific channels and a firms current product mix.
One approach to revising a current distribution system is to evaluatethree different distribution systems; an ideal system, the existingsystem, and a management bounded system.