Designing and Managing Value Network and Channels Chapter 15.
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Transcript of Designing and Managing Value Network and Channels Chapter 15.
![Page 1: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/1.jpg)
Designing and Managing Value Network and
ChannelsChapter 15
![Page 2: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/2.jpg)
Marketing Process
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What is a Marketing Channel?
• A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available for use or consumption
![Page 4: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/4.jpg)
Buyer Expectations for Channel Integration
• 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 online and offline purchase
Example: customers of online store in Taiwan can easily pick up the goods in 7-11
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Categories of Buyers
• Habitual shoppers • High value deal seekers• Variety-loving shoppers• High-involvement shoppers
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Types of Shoppers
• Service/quality customers• Price/value customers• Affinity customers
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Five Marketing Flows in the Marketing Channel
![Page 8: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/8.jpg)
Flow
• Forward Flow:Activity from the company to the customer constituted by physical, title, promotion functions.
• Backward Flow:Activity from customer to the company constituted by ordering and payment functions.
![Page 9: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/9.jpg)
Consumer and Industrial Marketing Channels
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Channel Levels
• Zero-Level Channel (a.k.a. Direct Marketing Channel): consists of a manufacturer selling directly to the final customer
• One-Level Channel: contains one selling intermediary, such as retailer
• Two-Level Channel: contains two intermediaries• Three-Level Channel: contains three
intermediaries• Multi Channel: use several level at the same time
![Page 11: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/11.jpg)
Channel Design Decision
• Push Strategy: involves manufacturer using its sales force to sell the product to end user
• Pull Strategy: involves manufacturer using advertising and promotion to induce consumers to ask intermediaries for the product, thus inducing the intermediaries to order it
• Designing a Channel System involves 4 steps:1. Analyze customers’ desired service output levels2. Establish objective and constraints3. Identify major channel alternatives4. Evaluate the major alternatives
![Page 12: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/12.jpg)
Analyze Customers’ Desired Service Output levels
• Lot Size: the number of units the channel permits a typical customer to purchase on one occasion
• Waiting Time: the average time customers of that channel wait for receipt of the goods
• Spatial Convenience: the degree to which the marketing channel makes it easy for customers to purchase the product
• Product Variety: the assortment breadth provided by the marketing channel
• Service backup: the add-on service provided by the channel
![Page 13: Designing and Managing Value Network and Channels Chapter 15.](https://reader035.fdocuments.us/reader035/viewer/2022081503/56649e5f5503460f94b59814/html5/thumbnails/13.jpg)
Identify Major Channel Alternatives
• Types of Intermediaries:
- Company sales force
- Manufacturer’s Agency- Industrial Distributor
• Number of Marketing Intermediaries:
- Exclusive Distribution: giving a limited number of dealers the exclusive right to distribute the company’s products in their territories- Selective Distribution: the use of more than one, but fewer
than all, of the intermediaries who are willing to carry the company’s products- Intensive Distribution: stocking the product in as many outlets as possible
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Terms of Responsibilities of Channel Members
• Price Policy: calls for the producers to establish a price list and schedule of discounts and allowances that intermediaries see as equitable and sufficient
• Conditions of Sale: payment terms and producer guarantees
• Distributors’ Territorial Rights: the distributors’ territories and the terms under which the producer will enfranchise other distributors
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Channel Value Added and Market Growth Rate
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Types of Conflict and Competition:- Vertical channel Conflict: conflict between
different levels within the same channels- Horizontal channel Conflict: conflict between
members at the same level within the channel- Multi channel Conflict: exist when the
manufacturer has established two or more channels that sell to the same market
Conflict, Cooperation & Competition
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Thank You