Unit 9 Place: distribution strategies that Place: distribution - - PowerPoint PPT Presentation

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Unit 9 Place: distribution strategies that Place: distribution - - PowerPoint PPT Presentation

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Unit 9 Place: distribution strategies that Place: distribution strategies that balance coverage and control balance coverage and control balance coverage and control balance coverage and control 1 CuuDuongThanCong.com

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Unit 9

Place: distribution strategies that balance coverage and control Place: distribution strategies that balance coverage and control balance coverage and control balance coverage and control

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R d M P i i th C t Road Map: Previewing the Concepts

  • Explain why companies use distribution channels

and discuss the functions these channels perform.

  • Discuss how channel members interact and how

they organize to perform the work of the channel.

  • Identify the major channel alternatives open to a
  • Identify the major channel alternatives open to a

company.

  • Explain how companies select, motivate, and

Explain how companies select, motivate, and evaluate channel members.

  • Discuss the nature and importance of marketing

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logistics and supply chain management.

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SLIDE 3

What is place? What is place?

Pl di ib i i b ki

  • Place or distribution strategy is about making

products available to customers when and where they prefer to evaluate, select, buy, y p , , y, consumer and dispose of them.

  • Distribution channels are the means by which

products flow from producer/provider to customer/consumer. /

  • “Where” and “When” decisions are critical.

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Wh t i Di t ib ti Ch l? What is a Distribution Channel?

Set of interdependent organisations Set of interdependent organisations Set of interdependent organisations involved in the process of making a product or service available for use or Set of interdependent organisations involved in the process of making a product or service available for use or product or service available for use or consumption by the consumer or business user product or service available for use or consumption by the consumer or business user business user. business user.

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Why are Marketing Intermediaries Why are Marketing Intermediaries Used?

  • The use of intermediaries results from their greater

efficiency in making goods available to target markets.

  • Offers the firm more than it can achieve on its own

through the intermediaries:

  • Contacts,

Contacts,

  • Experience,
  • Specialisation,
  • Scale of operation
  • Scale of operation.
  • Purpose: match supply from producers to demand from

consumers.

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A Distributor Reduces the Number of Channel Transactions (Fig. 11-1)

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Key Channel Attrbutes Key Channel Attrbutes

E i

  • Economics
  • Recognises exactly where the costs and profits of each

distribution alternative are, or should be, made in any channel.

  • Coverage
  • Optimises the availability of the product to the

Optimises the availability of the product to the targeted segments.

  • Control

O i di ib i hil

  • Optimum distribution to customers whilst not

surrendering too much decision-making authority over the value proposition to other members of the channel

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channel.

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Distribution Channel Functions

These Functions Should be Assigned to the Channel Member Who Can Perform Them Most Efficiently and Effectively.

Information Risk Taking Financing Promotion Physical Contact Physical Distribution

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Matching Negotiation

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SLIDE 9
  • List and briefly discuss the marketing channel

functions that are involved in completing and functions that are involved in completing and fulfilling transactions.

  • Which functions apply most in each of the

c u ct o s app y

  • st

eac

  • t e

following situations?

  • A retailer puts in a rush re-order for a needed Tết

item that is in short supply.

  • An Internet marketer seeks ways to identify and

contact its market

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contact its market.

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SLIDE 10

Number of Channel Levels Number of Channel Levels

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Channel Behaviour & Organization

  • The channel will be most effective when:
  • each member is assigned tasks it can do best.
  • all members cooperate to attain overall channel goals and satisfy

the target market.

  • When this doesn’t happen, conflict occurs:

e t s does t appe , co ct occu s

  • Horizontal Conflict occurs among firms at the same level of the

channel, i.e retailer to retailer.

  • Vertical Conflict occurs between different levels of the same
  • Vertical Conflict occurs between different levels of the same

channel, i.e. wholesaler to retailer.

  • Each channel member’s role must be specified and conflict

t b d

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must be managed.

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Conventional Distribution Channel

  • Vs. a Vertical Marketing System

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Innovations in Marketing Systems Innovations in Marketing Systems

Horizontal Marketing System T M C i Horizontal Marketing System T M C i

Hybrid Marketing System Hybrid Marketing System

Two or More Companies at One Channel Level Join Together to Follow a New Two or More Companies at One Channel Level Join Together to Follow a New A Single Firm Sets Up Two or More Marketing Channels to Reach One A Single Firm Sets Up Two or More Marketing Channels to Reach One Follow a New Marketing Opportunity. Example: Ni i Di d Follow a New Marketing Opportunity. Example: Ni i Di d Channels to Reach One

  • r More Customer

Segments. Example: Channels to Reach One

  • r More Customer

Segments. Example: Ninomaxx in Diamond Plaza, Highlands Coffee inside Bookstore Ninomaxx in Diamond Plaza, Highlands Coffee inside Bookstore Example: Retailers, Catalogs, and Sales Force Example: Retailers, Catalogs, and Sales Force

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Bookstore Bookstore

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Hybrid Marketing Channel Hybrid Marketing Channel

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Changing Channel Organisation g g g

A Major Trend is Toward Disintermediation j Which Means that Product and Service Producers are Bypassing Intermediaries and Going Directly to Final Buyers or That New Types of Channel Intermediaries are Emerging to Displace Traditional Ones Emerging to Displace Traditional Ones.

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Channel Design Decisions

Analysing Consumer Service Needs Analysing Consumer Service Needs Setting Channel Objectives & Constraints Responsibilities of Number of Types of Identifying Major Alternatives Responsibilities of Intermediaries Number of Intermediaries Types of Intermediaries l h l Evaluating the Major Alternatives Designing International Distribution Channels

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g g

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Number of Marketing Intermediaries

Intensive Di t ib ti Intensive Di t ib ti Selective Selective Distribution Distribution Distribution Distribution Exclusive Distribution Exclusive Distribution

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  • Decide which distribution strategy--

gy intensive, selective, or exclusive--is used for the following products, and why:

KFC Chicken B ge

  • KFC Chicken Burger
  • Aquafina Bottles (Small)
  • Nike Running Shoes

g

  • Bottled Cooking Gas
  • Honda Dream

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Channel Management Decisions Channel Management Decisions

Selecting Channel Members Moti ating Channel Membe s

BACK

Motivating Channel Members

FEED

Evaluating Channel Members

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Supply Chain Management Supply Chain Management

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Goals of the Logistics System g y

Higher Distribution Costs; Hi h C t S i Higher Customer Service Levels

Goal: Goal: To Provide a Targeted Level of Customer Service t th L t C t at the Least Cost.

Lower Distribution Costs; Lower Customer Service

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Levels

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Major Logistics Functions

Costs Costs Order Processing Order Processing

j g

Costs Minimize Costs of Attaining Logistics Objectives Costs Minimize Costs of Attaining Logistics Objectives Order Processing Received Processed Shipped Order Processing Received Processed Shipped Objectives Objectives Warehousing Warehousing Shipped Shipped

Logistics

T t ti Warehousing Storage Distribution Automated Warehousing Storage Distribution Automated

Functions

Transportation Rail, Truck, Water, Pipeline, Ai I d l Inventory When to order How much to order Inventory When to order How much to order Automated Automated Air, Intermodal

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Just-in-time Just-in-time

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Integrated Logistics Management Integrated Logistics Management

C i h idi

  • Concept Recognises that Providing Better

Customer Service and Trimming Distribution Costs Requires Teamwork Teamwork, Distribution Costs Requires Teamwork Teamwork, Both Inside the Company and Among All the Marketing Channel Organizations.

  • Involves:
  • Cross-functional teamwork inside the

company company

  • Building channel partnerships
  • Third-party logistics

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Rest Stop: Reviewing the Concept Rest Stop: Reviewing the Concept

l h d b h l

  • Explain why companies use distribution channels

and discuss the functions these channels perform. Di h h l b i t t d h

  • Discuss how channel members interact and how

they organise to perform the work of the channel. Identify the major channel alternatives open to a

  • Identify the major channel alternatives open to a

company.

  • Explain how companies select motivate and
  • Explain how companies select, motivate, and

evaluate channel members.

  • Discuss the nature and importance of marketing

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  • Discuss the nature and importance of marketing

logistics and supply chain management.

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