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

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 https://fb.com/tailieudientucntt

Road Map: Previewing the Concepts R d M P i i th C t  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 logistics and supply chain management. 2 CuuDuongThanCong.com https://fb.com/tailieudientucntt

What is place? What is place?  Place or distribution strategy is about making Pl di ib i i b ki 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. 3 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Wh t i What is a Distribution Channel? Di t ib ti Ch l? Set of interdependent organisations Set of interdependent organisations Set of interdependent organisations Set of interdependent organisations involved in the process of making a involved in the process of making a product or service available for use or product or service available for use or product or service available for use or product or service available for use or consumption by the consumer or consumption by the consumer or business user business user business user. business user. 4 CuuDuongThanCong.com https://fb.com/tailieudientucntt

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. 5 CuuDuongThanCong.com https://fb.com/tailieudientucntt

A Distributor Reduces the Number of Channel Transactions (Fig. 11-1) 6 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Key Channel Attrbutes Key Channel Attrbutes  Economics E i  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  Optimum distribution to customers whilst not O i di ib i hil surrendering too much decision-making authority over the value proposition to other members of the channel channel. 7 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Distribution Channel Functions These Functions Should be Assigned to the Channel Member Who Can Perform Them Most Efficiently and Effectively. Risk Taking Information Financing Promotion Physical Physical Contact Distribution Matching Negotiation 8 CuuDuongThanCong.com https://fb.com/tailieudientucntt

 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 ost eac o t e following situations?  A retailer puts in a rush re-order for a needed T ế t item that is in short supply.  An Internet marketer seeks ways to identify and contact its market contact its market. 9 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Number of Channel Levels Number of Channel Levels 10 CuuDuongThanCong.com https://fb.com/tailieudientucntt

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 must be managed. t b d 11 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Conventional Distribution Channel Vs. a Vertical Marketing System 12 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Innovations in Marketing Systems Innovations in Marketing Systems Horizontal Marketing Horizontal Marketing Hybrid Marketing Hybrid Marketing System System System System Two or More Companies T Two or More Companies T M M C C i i A Single Firm Sets Up A Single Firm Sets Up at One Channel Level at One Channel Level Two or More Marketing Two or More Marketing Join Together to Join Together to Follow a New Follow a New Follow a New Follow a New Channels to Reach One Channels to Reach One Channels to Reach One Channels to Reach One Marketing Opportunity. Marketing Opportunity. or More Customer or More Customer Segments. Segments. Example: Example: Example: Example: Example: Example: Ni Ninomaxx in Diamond Ninomaxx in Diamond Ni i i Di Di d d Plaza, Highlands Plaza, Highlands Retailers, Catalogs, Retailers, Catalogs, Coffee inside Coffee inside and Sales Force and Sales Force Bookstore Bookstore Bookstore Bookstore 13 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Hybrid Marketing Channel Hybrid Marketing Channel 14 CuuDuongThanCong.com https://fb.com/tailieudientucntt

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. 15 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Channel Design Decisions Analysing Consumer Service Needs Analysing Consumer Service Needs Setting Channel Objectives & Constraints Identifying Major Alternatives Types of Types of Number of Number of Responsibilities of Responsibilities of Intermediaries Intermediaries Intermediaries Evaluating the Major Alternatives l h l Designing International Distribution Channels g g 16 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Number of Marketing Intermediaries Intensive Intensive Selective Selective Distribution Distribution Di t ib ti Di t ib ti Distribution Distribution Exclusive Exclusive Distribution Distribution 17 CuuDuongThanCong.com https://fb.com/tailieudientucntt

 Decide which distribution strategy-- gy intensive, selective, or exclusive--is used for the following products, and why:  KFC Chicken Burger KFC Chicken B ge  Aquafina Bottles (Small)  Nike Running Shoes g  Bottled Cooking Gas  Honda Dream 18 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Channel Management Decisions Channel Management Decisions Selecting Channel Members BACK Moti ating Channel Membe s Motivating Channel Members FEED Evaluating Channel Members 19 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Supply Chain Management Supply Chain Management 20 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Goals of the Logistics System g y Higher Distribution Costs; Hi h Higher Customer Service C t S i Levels Goal: Goal: To Provide a Targeted Level of Customer Service at the Least Cost. t th L t C t Lower Distribution Costs; Lower Customer Service Levels 21 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Major Logistics Functions j g Order Processing Order Processing Order Processing Order Processing Costs Costs Costs Costs Received Received Minimize Costs of Minimize Costs of Processed Processed Attaining Logistics Attaining Logistics Shipped Shipped Shipped Shipped Objectives Objectives Objectives Objectives Logistics Warehousing Warehousing Warehousing Warehousing Transportation T t ti Functions Storage Storage Rail, Truck, Distribution Distribution Water, Pipeline, Automated Automated Automated Automated Ai Air, Intermodal I d l Inventory Inventory When to order When to order How much to order How much to order Just-in-time Just-in-time 22 CuuDuongThanCong.com https://fb.com/tailieudientucntt

Integrated Logistics Management Integrated Logistics Management  Concept Recognises that Providing Better C i h idi Customer Service and Trimming Distribution Costs Requires Teamwork Distribution Costs Requires Teamwork 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 23 CuuDuongThanCong.com https://fb.com/tailieudientucntt