Session 18 Flashcards
(24 cards)
Marketing channels - creating customer access: what interest ourself to marketing channels? (3)
- Customer’s decision to buy often based on experience at point of purchase (offline or online)
- Businesses often spend much more $$$ on channels than advertising
- How we create customer access can be a major source of competitive advantage and marketplace disruption
Factors included in place(3)
Is product available at:
1. the right time
2. the right place
3. in the right quantity?
What is a marketing channel?
Path that enables goods/services to flow from producers to end users
Who can be a channel member?
Everyone involved in the distribution channel
Name 3 types of intermediaries
- Retailers
- Wholesalers
- Agents/brokers
2 types of distribution channels and definition
- Direct Channel (does not have any intermediaries)
- Indirect Chanel (involves intermediaries (retailers and wholesalers))
What is an agent and brokers channel?
Channel involves agents or brokers who:
- Have legal authority to represent producers, wholesalers or retailers
- Do not take ownership in the product
(may involve or not retailers or wholesalers)
What is C2C Channel
Consumer can become sellers/manufacturers
How do intermediaries add value (3 ways)?
- Transactional functions (buying, selling)
- Logistical functions (transporting, storing, sorting, creating assortments)
- Facilitating functions (payment processing, consumer financing, market research, promotion. product testing, data/analysis. platform maintenance)
Negative effects of intermediaries? (3)
- Increases price for end customer
- May interfere with branding strategy
- Channel conflicts may arise
What are channel conflicts?
Occur when 2 channel members have goals that are at odds with each other
What is an horizontal channel conflict?
- Occurs among channel members at the same level (e.g., aggressive geographic expansions, retailers are competing on price)
E.g.: Provigo selling Coke and Pepsi but profit is different on both products
What is a vertical channel conflict?
Occurs among channel members at different levels (e.g., disintermediation, asymmetric bargaining power)
How to avoid channel conflicts?
Vertical integration = control more of the channel
What is a vertical marketing system?
Central coordination of the marketing channel
Characteristics of independent marketing channel? (3)
- Channel members are independent
- Each seeks to maximize its own profit
- Can result in poor performance/high prices
Characteristics of vertical marketing system (2)
- Channel members act as a unified system
- Greater control, less conflict, economies of scale
What are 3 different types of VMS?
- Corporate
- Contractual
- Administrated
What is corporate VMS?
Successive stages of production and distribution under one single ownership (ZARA)
What is contractual VMS?
Successive stages of production and distribution based on contracts agreed by independent firms (McDonald’s)
What is administered VMS?
Successive stages of production and distribution coordinated by one powerful channel member (Walmart)
Characteristics of distribution intensity (2)
- Not always “more = better”
- Coverage of target market
Distribution intensity types (3)
- Intensive (high coverage, convenient for end customers, high conflict potential)
- Selective (retailers compete to carry our product)
- Exclusive (high margins throughout the channel, stable level of distribution)
Types of target market coverage? (3)
- Intensive distribution: as many outlets as possible (convenience g)
- Exclusive distribution: as few outlets as possible (shopping goods)
- Selective distribution: balances between intensive and exclusive (specialty goods)
*g = goods
