If you sell tangible goods, channels and logistics matter

GOALS: You could explain push vs. pull strategies and what channels need to accomplish (231-233), what makes for better channel arrangements (236-238), how to cope with channel conflict (242-243), and how to set and implement logistics objectives (259-262).

13-2

Manufacturer Channel partner Customer

Push Strategy:

Manufacturer Channel partner Customer

Communication Flow

Product Flow

Pull Strategy:

13-3

TASKS for some part of the channel (p. 233 offers more detail in a table)

• Transport tangible goods

• Advertise, which may include gathering information about buyers, competition, changes in the legal environment -- whatever

• Store inventory

• Kontact buyers, and after a sale Kollect the agreed-on price

13-4

So how would you design a channel, or evaluate the one you have?

• Establish channel objectives from the customers’ perspective: Speed? Efficiency to cut costs? Convenience?

• Identify major channel alternatives: Where would customers expect to buy what you are marketing?

• Evaluate major channel alternatives. The Internet may be a second channel where you sell direct

13-5

Managing Channel Conflict

• Adoption of superordinate goals• Exchange of employees• Joint membership in trade associations• Co-optation (give channel members at

least advisory roles, and maybe power)• Diplomacy, mediation, or arbitration• Legal recourse

13-6

Logistics: think of cost/service tradeoffs

M = T + FW + VW + S

Where . . . M = total market-logistics cost of proposed system; T = total freight cost of proposed system;FW = total fixed warehouse cost of proposed system;VW = total variable warehouse cost of proposed system S = total cost of lost sales due to average delivery delay

Calculating the Cost of Market-Logistics Systems

Why services are the path to profit or disaster

GOALS: you could explain why services are

risky to market because they are risky to

buy --- and what to do about that (195-205)

•

11-8

Repairs? Education? Consulting? How do we make these services “tangible”?

• Place

• People

• Equipment

• Communication

• Symbols

11-9

Air travel? Restaurant? Haircutters? How do we make “inseparable” pay off?

• Services are produced and consumed at the same time (air travel)

• Strong preferences for service providers exist (Who holds that scissors?)

• Those who provide the service, and often others who are buying it, become part of the service experience (restaurants)

11-10

Think about any service company/organization

Perishability

How do we match demand to supply becomes the relevant question.

• Services cannot be inventoried or otherwise stored

• Capacity/demand management is critical• Demand-side

strategies• Supply-side

strategies