managing marketing channels of distribution and logistics professor chip besio cox school of...
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MANAGING MARKETING CHANNELS OF DISTRIBUTION AND
LOGISTICS
Professor Chip BesioCox School of BusinessSouthern Methodist University
The variety of terms used for marketing intermediaries that vary in use in consumer and business markets
Intermediaries minimize transactions and the cost of distribution for producers and customers
NATURE AND IMPORTANCE OF MARKETING CHANNELS
THE VALUE CREATED BY INTERMEDIARIES
Marketing Channel
Functions Performed by Intermediaries
• Transactional Function• Logistical Function
• Facilitating Function
Utilities Received by Consumers
Marketing channel intermediaries perform three functions, each consisting of different activities
Common marketing channels for consumer offerings by the kind and number of intermediaries
Common marketing channels for business offerings by the kind and number of intermediaries
One Telecom Company’s Consumer Market Channels
CUSTOMERACQUISITION
BusinessOffice
Smart Moves
Newcomer
Agents
CUSTOMERDEVELOPMENT
Best CustomerCenters
RSC Service Upselling
Direct Mail
OutboundTelemarketin
g
Welcome Package
Directory
MASSMEDIA
AdvertisingResponse
TV
Radio
Specialty
MAILBOXMARKETING
DirectMail
Catalog
Internet
FACE TOFACE
RetailStores
Express Kiosks
NationalRetailers
Local Agents
Direct Sales
LIFESTYLEINTERCEPT
Military
Campus
Retirement
Kids Away
EventMarketin
g
On the Move
AFFINITY
Employee/Employer
Associations
Co-MarketingPartners
CHANNEL STRUCTURE & ORGANIZATIONELECTRONIC & DIRECT MARKETING CHANNELS;
MULTICHANNEL MARKETING
Electronic Marketing Channels
Direct Marketing Channels
Multichannel Marketing
Consumer electronic marketing channels are similar to those for consumer and business offerings
CHANNEL STRUCTURE & ORGANIZATIONDUAL DISTRIBUTION &
STRATEGIC CHANNEL ALLIANCES
Dual Distribution
Strategic Channel Alliances
HELP YOUR CHILD FEEL BETTER WITH TRIAMINIC® PRODUCTS AND A REDBOX
MOVIE RENTAL
1. Customers demand it.2. Market access.3. Lower marketing and selling expenses.4. Distributors perform necessary functions.5. Reduced collection problems.
The Top FiveReasons for Selling Through Distributors
Functions performed by independent wholesaler types
GOING ONLINEVisit an Apple Store to See
What All the Excitement is About
Three types of vertical marketing systems: corporate, contractual (most popular), and administered
McDonalds and H&R BlockWhat vertical marketing system does each use?
CHANNEL CHOICE AND MANAGEMENTFACTORS AFFECTING CHANNEL CHOICE
Environmental Factors
Consumer Factors
Product Factors
Company Factors
CHANNEL CHOICE AND MANAGEMENTCHANNEL CHOICE CONSIDERATIONS
Target Market Coverage
• Intensive Distribution
• Exclusive Distribution
• Selective Distribution
CHANNEL CHOICE AND MANAGEMENTCHANNEL CHOICE CONSIDERATIONS
Profitability
• Margins Earned
• Channel Costs
Global Dimensions of Marketing Channels
USING MARKETING DASHBOARDSChannel Sales and Profit at
Charlesburg Furniture
CHANNEL CHOICE AND MANAGEMENTCHANNEL RELATIONSHIPS
Sources of Channel Conflict
• Vertical Conflict
• Disintermediation
• Horizontal Conflict
CHANNEL CHOICE AND MANAGEMENTCHANNEL RELATIONSHIPS
Legal Considerations
•Dual Distribution
•Vertical Integration
•Exclusive Dealing
•Tying Arrangements
•Refusal to Deal
•Resale Restrictions
The Clayton Act and Sherman Act place legal restrictions on specific marketing channel strategies and practices