MARKETING CHANNELS & DISTRIBUTION Click to edit Master subtitle style

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Objective
What is a marketing channel system and value network? What work do marketing channels perform? How should channels be designed? What decisions do companies face in managing their channels? How should companies integrate channels and manage channel conflict? 4/14/12

Marketing Channel

Sets of interdependent organizations involved in the process of making a product or service available for use or consumption.
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Channels and Marketing Decisions

Push Strategy Pull Strategy

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415-4

HYBRID CHANNELS

Multi-channel delivery model

m-Banking Internet Bank ATM Network Branch Network Call centre

Agent Network

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VALUE NETWORKS

Its all about relationships Upstream Downstream

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Categories of Buyers
Habitual shoppers

High value deal seekers

Variety-loving shoppers

High-involvement shoppers

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715-7

4 Ps is replaced by SIVA

Solutions Information Value Access

815-8

Increasing Efficiency

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915-9

Marketing Channel Flows

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1015-10

Consumer Marketing Channels

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1115-11

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Industrial Marketing Channels

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1415-14

Designing a Marketing Channel System

Analyze customer needs

Establish channel objectives

Identify major channel alternatives

Evaluate major channel alternatives

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1515-15

Channel Service Outputs

Lot size

Waiting/delivery time

Spatial convenience

Product variety

Service backup

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1615-16

Identifying Channel Alternatives

Types of intermediaries

Number of intermediaries

Terms and responsibilities

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1715-17

Number of Intermediaries
Exclusive Distribution Selective Distribution Intensive Distribution
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Channel-Management Decisions
Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members
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Channel Power

Coercive Reward Legitimate Expert Referent

2015-20

Channel Integration & Systems

Channel Integration & Systems

Vertical Marketing systems

Horizontal Marketing systems

Multichannel Marketing systems

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Vertical Marketing Channel Integration

Conventional Marketing Channel Manufactur A channel consisting of er one or more independent producers, Wholesaler wholesalers, and retailers, each a separate business Retailer seeking to maximize its own profits even at the expense of profits for Consumer the system as a whole

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Vertical Marketing System VMS is one in which the main members of a

distribution channelproducer, wholesaler, and retailerwork together as a unified group in order toManufactur meet consumer needs.
er Wholesaler Retailer
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Consumer

Vertical Marketing System Types Vertical

Marketing System
Acorporate VMS Acontractual VMS Anadministered VMS

WholesalerSponsored Voluntary Chains Manufacture sponsored retail franchise 4/14/12 system

Franchises

Retail Cooperatives

Manufacture sponsored wholesale franchise system

Service sponsored retail franchise system

Service sponsored franchise system

Channel Systems (Examples)

Corporate: other 1 channel member owns channel members

Contractual: channel members operate under contractual agreements ( franchises) Administered: channel members operate based on agreed upon plans (Channel Captains)

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Horizontal marketing systems

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity

hybrid marketing channel distribution system in which a single firm sets Multichannel
up two or more marketing channels to reach one or more customer segments.

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The Hybrid Grid

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Conflict, Cooperation, And Competition

What types of conflict arise in channels? What causes channel conflict? What can marketers do to resolve conflict situations? Click to edit Master subtitle style

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Types of conflict and competition

o

Vertical channel conflict. Horizontal Channel conflict. Multichannel conflict.

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Causes of channel conflict

o

Goal incompatibility. Unclear roles and rights. Differences in perception. Intermediaries dependence on the

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Managing channel conflict

o

Adoption of Superordinate goals. Exchange of employee. Joint membership. Co-optation.

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Dilution and cannibalization

o

Marketer must also be careful not to dilute their brand through inappropriate channels. For example Asian Sky Shop and Shubhiksha

Cannibalization:- It means to take parts from machines or vehicle in 4/14/12

Legal and ethical issues in channel relations

o

Exclusive dealing. Tying agreement. Dealers rights.

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E-commerce

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Types of E-commerce

Pure Click Companies Brick - and - Click Companies M - Commerce

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WOMENS WEAR
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Womenswear Market Scenario

Indian womenswear market is going through a phase of renovation. Total value of womenswear market is estimated to be around Rs. 37,000 crore during 2007. It further indicates a positive growth rate of 14% a year, for the next five 4/14/12

Womenswear Market Scenario (cont.)

Many manufacturers who were initially concentrating only on men's wear have started to focus more on the formal wears for women. Their main targets are working women in the age group, 22-40 Demand for women wear grew due to increased number of working 4/14/12 woman who had financial

Main categories for Women's Wear

Suits and coats T-shirts Jumpers Tops Jackets Skirts Jeans

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Sarees

BRANDS OF WOMENS WEAR

Raymond Park Avenue Woman Provogue Esprit Mango Indian Terrain Van Heusen Allen Solly Blackberry Levi's

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VAN HEUSEN

launched womens wear (in end2006) Product was formal wear Premium pricing Target people were working ladies 4/14/12

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Top Indian Designers

Manish Malhotra Ritu Beri Anita Dongre Neeta Lulla

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BIBLIOGRAPHY

Marketing management - Philip Kotler

13th edition

www.vernaallee.com www.fachak.com www.indianchild.com

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THANK YOU

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