CHANNEL POWER

PRESENTED BY:-RAJAT CHOUDHARYFAIZAN SHAKIRSUHAIL SULTANROHITH MANDUVAKIMI GUGLANIGAUTHAM VEMULA

An aid for org. success….

ABOUT THE CONCEPT…What is a Channel? A set of interdependent organizations or indivisduals

(intermediaries) involved in the process of making a product available for consumption or use by the consumer or business buyer.

Channel power The strength of channel members do lead to create channel

power.

Why Marketing Intermediaries?They offer efficiency in making products available to target markets

through: Contacts Experience Specialization Scale of operation

Channel Functions

Contacts with prospective buyersMatching buyers and sellersNegotiationPhysical distributionMarketing research, informationCustomer servicePromotionFinancingPricingBuyingTraining

Channel objectiveEnsure the availability of product

at all time in the market.Increasing the sharing of

information & technology across the participants

Try to enhance the public image of the company

Provide the best services to consumer

Channel Strategy

The broad principles by which a firm expects to achieve its distribution objectives for satisfying

its customers

Channel Design / Strategy

Customer Analysis

Channel Objectives

Design Alternatives

Decide and Implement

•Company Analysis•Competitor Analysis•Analysis of Existing Channel

What benefits are sought?What activities are required?

Strategic Issues / Dimensions

Economics Control Adaptability

Design Alternatives Design Alternatives - Strategic Issues

1. Number of Channel Levels: Direct vs. Indirect

2. Number of Members (at a level): Exclusive vs. Selective vs. Intensive

3. Allocating Channel Functions / Responsibilities

4. Type of Marketing System

Marketing Channel Strategy is Growing in Importance. Why?

Five Reasons

(1) Search for Sustainable Competitive Advantage

(2) Growing Power of Retailers in Marketing Channels

(3) The Need to Reduce Distribution Costs(4) The Increased Role and Power of

Technology(5) The New Stress on Growth

EX. OF CHANNELS strategy

MANUFACTURER

CONSUMER

MANUFACTURER

WHOLESELLER

RETAILER

CONSUMER

DIRECT CHANNEL INDIRECT CHANNEL

Building Relationships with Channel Members

Find Out the Needs and Problems of Channel Members

-informal information system (“grapevine”)

-research studies of channel members

-research studies by outside parties

-marketing channel audit-distributor advisory councils

Offer Support to Channel Members that is Consistent with Their Needs and Helps Solve their Problems

-cooperative arrangements-partnerships and strategic

alliances-distribution programming

Provide Leadership to Motivate Channel Members

-use power effectively-recognize causes of conflict-resolve conflicts

Classic Marketing Channel Strategies Still Relevant Today

Dual DistributionExclusive DealingFull-Line ForcingPrice DifferentiationPrice MaintenanceRefusal to DealResale RestrictionsTying Agreements

How to maintain strong relation?

(1) Recognition of interdependence of channel members

(2) Close cooperation between channel members

(3) Careful specification of roles, rights, and responsibilities in the relationship

(4) Coordinated effort focused on common goals

(5) Good communications and trust between channel members

Bases of Power in the Marketing Channel

Reward PowerCoercive PowerLegitimate PowerReferent PowerExpert Power

Effective Channel Management Depends

on How Well These Power Bases are Combined and Used

Causes of Marketing Channel Conflict

Role IncongruitiesResource ScarcitiesPerceptual DivergenciesExpectational DifferencesDecision Domain DisagreementsGoal IncompatabilitiesCommunication Difficulties

I. The Search for Sustainable Competitive Advantage

Sustainable Competitive Advantage:

A competitive advantage that cannot be quickly and easily copied by competitors

A sustainable competitive advantage is becoming more difficult to attain through:

Product Strategy- rapid technology transfer enables competitors to quickly produce similar products

Pricing Strategy- global economy allows competitors to find low cost production to match prices

Promotion Strategy- high cost, clutter, and short life promotional campaigns limit competitive advantage

THANK YOU