Marketing Channel Mkt750

8/10/2019 Marketing Channel Mkt750

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MKT 750 Individual PresentationMarketing Channel

Ahmad Aman Bin Mohd Saifuddin (2013985225)


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WHAT IS MARKETING

CHANNEL ?

TITLE SEPARATOR


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1.0 Marketing Channel

A Marketing Channel is a set of interdependent

organizations involved in the processof making a product or

service available for use or consumption

OR

Marketing Channel is a set of interdependent organizationsthat ease the transfer of ownership as products moves from

producer to business user or consumer

Also known as Distribution Channels


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Objectives Of The Marketing Channels

To ensure the availability of the product at the point of

sale

To build the channel member loyalty.

To stimulate channel members to put greater selling

efforts.

To developed managerial efficiency in the channel

organization.

To identify your organization at buyer level.

To have an effective and efficient distribution system ,

to make your product and services available.


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TheImportance Of The Marketing Channels

Time and place utility

Convenience to customer

Information to the producer

Stability in prices.

Promotional Activities.

Storage of finished goods(additional).

Finance the producer.


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Marketing channel strategy growing inimportance. WHY???

Search for sustainable competitive advantage.

Growing power of retailers in marketingchannel.

Need to decrease the cost of distribution.

Increased role and power of Technology.

New stress on growth.


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FunctionsOf Marketing Channels

InformationProvider

PriceStability

Promotion

Financing Titleexchanges

MatchingDemandAnd Supply

Matching

Buyer andSeller


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Types of Marketing Channels

Method of selling directly toend user from themanufacturer with nointermediaries

DirectChannels

Involves a products passingthrough intermediaries inorder to be made available for

purchase by a customer

Indirect

Channels


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Companies Using Direct MarketingChannels


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Companies Using IndirectMarketing Channels


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Consumer And BusinessChannel


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Five Marketing Flows In the Marketing Channel

Example : Forkl i f t Trucks


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CHANNEL STRATEGIES

IntensiveDistributions

SelectiveDistr ibut ions

Exclusive

Dist r ibut ions


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CHANNEL STRATEGIESIntensive Distributions

Where manufacturers distributes hisproducts through as many distributors aspossible.

It is used for the products that ischaracterized as low involvement of thecustomer and where customer looks forconvenience location.

Products like chocolates, soap, shavingblades and detergents are distributed thisway.


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CHANNEL STRATEGIESSelective Distributions

Where manufacturers distributes his productsthrough selected outlets.

It is appropriate for consumer shopping goods suchas various type of clothing and appliances and

business accessories equipments.

Usually the manufacturer move to selectivedistributions tohinges from high cost of intensive distributionunsatisfactory performance of middlemenEnhance image of the productsStrengthen customer servicesImprove quality controlMaintain influence on prices


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CHANNEL STRATEGIESExclusive Distributions

Where manufacturers distributes his productsthrough relative fewer number of major outlets whoexclusively deal with it and not all competing brand.

This is common for product who seeks high

prestigious image.

It is commonly used for designer ware, majordomestic appliances, and even automobiles.

By granting exclusive rights the manufacturer hopesto have control over the intermediaries price,promotion, credit inventories and services policy.


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CHANNEL STRATEGIESSummary


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Designing a Channels Systems

Formulating Channel Objectives

Identifying channel functions

Linking design to product characteristics

Evaluation of distributions environment

Evaluation of competitors channel design

Matching channel design to company resources

Evaluating alternatives and selecting the best


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Bases of Power in Marketing Channels

Reward Power

Coercive Power

Legitimate Power

Referent Power

Expert Power

Effective Channel Management Depends On How Well

These Power Bases Are Combined and Used


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HOW

MARKETING

CHANNEL

INFLUENCES


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HOW MARKETING CHANNEL INFLUENCES - Segmentation

Channel Segmentation is about defining and

segmenting a retail channel, with implications for

Point of Purchase strategy and activation.

Understanding and segmenting your channels can

minimise wastage, increase your product sales via

relevance, deepen your relationship with retailers and

set realistic expectations for product launches and

sales performance given your understanding of the

channel and its role


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HOW MARKETING CHANNEL INFLUENCES - Segmentation

Channel Segmentation influences organizationsapplications on the following:-

1. Distributions and ranging strategy

2. Space and layout strategy

3. Visibility, merchandising display

4. Pricing and price promotion

5. Retailer, staff education & incentives

6. Measurement &evaluations tools for channel

segments.


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HOW MARKETING CHANNEL INFLUENCES - Communication

Communication can be described as gluethat holds together a channel ofdistributions.

It helps organizations to developed anddisseminates communications to stimulatepurchasing.


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Push & Pull Strategy

push strategy directs communication efforts at channel

members many products, such as business products, are

promoted with a push strategy, involving

personal selling and use of trade promotions pull strategy

directs promotion at the end consumer most consumer products would rely more

heavily on a pull strategy where promotion is directed at the consumer to

stimulate demand


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Producer Wholesaler Retailer Consumer

PUSH STRATEGY

Producer Wholesaler Retailer Consumer

Product flow Communication effort

PULL STRATEGY


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HOW MARKETING CHANNEL INFLUENCES - Communication

In order to have an effectivecommunication in channel members theorganizations have to manages/clarify

Objectives between manufacturer andretailer

The differences in languages

Participation in decision making process

that involve directly to their businesses. Adequacy of information


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HOW MARKETING CHANNEL INFLUENCES - Pricing

Channel members conduct pricenegotiations with buyers and assists inarriving at the right price (the price that isacceptable for user and manufacturer.

Pricing in Channel Management involves

Cost

Market

Competition Channels


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HOW MARKETING CHANNEL INFLUENCES - Offering

The marketing channel help in identifying the best strategy todistribute his product which reflect the nature of product asexplain in table below :-

NO TYPES OFPRODUCT

NATURE OF

PRODUCTCHANNEL

STRATEGYEXAMPLE OF

PRODUCTS

1. Convenience Willing to invest invery limited

shopping efforts

IntensiveDistribution

Food,cleaningproducts&personal

care

2. Shopping Consumer iswilling in a great

deal of time and

effort

Selective

DistributionClothing & Personal

services

3. Specialty Goods are thosethat are of interest

only to a narrow

segments of the

population

Exclusive

DistributionHigh end luxury

automobiles


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ProductComparisonadvertising

ProductBenefits

advertising

ProductFamily

advertising

Corporateadvertising

Other Offering Strategy


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References

Cullen, Kathleen and Caryl Helsel, Defining Revenue

Management, Top Line to Bottom Line, HSMAI Foundation,

Bethesda, MD, 2006

Sagar Gadekar, MIT Pune's Maharashtra Academy of

Engineering, Alandi, Pune MD, 2012.

Faculty leebow.drexel.edu/RoselbloomB/Channel

Shodhganga.inflibnet.ac.in/bitstream

www.knowthis.com/product-decisions


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Conclusions

Distributions is the most important variable inmarketing plans of most consumer andbusiness goods manufactures, becausemanaging such a massive sales and

distribution network is in itself a huge task

Understanding the nature of MarketingChannel can help avoids/manages the conflicttherein and perhaps ensure the effectivenessof product availability in the market


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Other Offering Strategy

In a market where your offering is one of several providingsimilar capabilities, if your offering stacks up well whencomparing features then a product comparison ad can bebeneficial.

Product Benefits advertisingWhen you want to promote your offering without comparison tocompetitors, the product benefits ad is the correct approach.This is especially beneficial when you have introduced a newapproach to solving a user need and comparison to the oldapproaches is inappropriate.

Product Family advertisingIf your offering is part of a group or family of offerings that canbe of benefit to the customer as a set, then the product familyad can be of benefit.

Corporate advertisingWhen you have a variety of offerings and your audience is fairlybroad, it is often beneficial to promote your enterprise identityrather than a specific offering

Documents

Marketing Channel Mkt750