Chapter 15 top 10 - designing and managing integrated marketing concepts

1. Crisostomo, Kathleen Lizette C. MARKMA CHAPTER 15: DESIGNING AND MANAGING INTEGRATED MARKETING CHANNELS

2. Top 10 Concepts 1. Marketing Channel System: Push and Pull 2. Categories of Buyers 3. Decisions in Designing a Marketing Channel System 4. Analyzing customer needs: Channel Service Outputs 5. Identifying Channel Alternatives: Three Elements 6. Channel-Management Decisions 7. Channel Power 8. Channel Integration and Systems 9. Channel Coordination / Channel Conflict 10. E-Commerce Marketing Practices

4. • Push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users. - used for low brand loyalty in categories or impulse items

5. • A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries. - used when consumers can differentiate brands well and brand are chosen prior to purchase

7. Categories of Buyers • Habitual Buyers • Same place, same manner • High value deal seekers • They know what they need and they surf before buying at the lowest possible price

8. Categories of Buyers • Variety-loving shoppers • Gather info through various channels, take advantage of high-touch services, then buy in their favorite channel regardless of price • High-involvement shoppers • Gather info through alls channels and purchase in a low cost channel but takes advantage of customer support from a high-touch channel

10. Decisions in Designing a Marketing Channel System A. Analyze customer needs * Greater service = greater channel costs = higher prices

11. Decisions in Designing a Marketing Channel System A. Analyze customer needs * Greater service = greater channel costs = higher prices B. Establish channel objectives * Which market segment to serve and what best channel to use

12. Decisions in Designing a Marketing Channel System A. Analyze customer needs * Greater service = greater channel costs = higher prices B. Establish channel objectives * Which market segment to serve and what best channel to use C. Identify major channel alternatives * Each channel reaches a different segment and delivers the right product at the least cost

13. Decisions in Designing a Marketing Channel System A. Analyze customer needs * Greater service = greater channel costs = higher prices B. Establish channel objectives * Which market segment to serve and what best channel to use C. Identify major channel alternatives * Each channel reaches a different segment and delivers the right product at the least cost D. Evaluate major channel alternative * vs. economic, control and adaptive criteria

15. Analyzing customer needs: Channel Service Outputs – Lot size: How many can be purchased on 1 occasion? ?

16. Analyzing customer needs: Channel Service Outputs – Lot size: How many can be purchased on 1 occasion? – Waiting and delivery time: The faster, the better

17. Analyzing customer needs: Channel Service Outputs – Lot size: How many can be purchased on 1 occasion? – Waiting and delivery time: The faster, the better – Spatial convenience: how easy is it to buy the product?

18. Analyzing customer needs: Channel Service Outputs – Product variety: more choices = more chances of finding what is needed

19. Analyzing customer needs: Channel Service Outputs – Service back-up: add-ons

21. Identifying Channel Alternatives: Three Elements 1. Types of intermediaries • Do I need a wholesaler? Retailer? Dealer?

22. Identifying Channel Alternatives: Three Elements 1. Types of intermediaries * Do I need a wholesaler? Retailer? Dealer? 2. Number of intermediaries * Distribution: Exclusive? Selective? Intensive? * Risk = price wars among retailers

23. Identifying Channel Alternatives: Three Elements 1. Types of intermediaries * Do I need a wholesaler? Retailer? Dealer? 2. Number of intermediaries * Distribution: Exclusive? Selective? Intensive? * Risk = price wars among retailers 3. Terms and responsibilities * Respect + Opportunity to make profits

25. Channel-Management Decisions Because to the customers, the channels are Select the company!

26. Channel-Management Decisions Because to the customers, the channels are Select the company! Train Because intermediaries are partners in satisfying customers! Motivate

27. Channel-Management Decisions Because to the customers, the channels are Select the company! Train Because intermediaries are partners in satisfying customers! Motivate Evaluate Is the strategy still working? (external analysis Modify and current channels)

29. • Channel Power is the ability to alter channel’s behavior • Cooperation is a huge challenge!

30. Channel Power a. Coercive power - Withdraw resource or terminate relationship b. Reward power - Extra benefit for performance c. Legitimate power - Behavior warranted under the contract d. Expert power - Must develop new expertise for them to cooperate e. Referent power - Respect causes intermediaries to have pride in the association

32. Channel Integration and Systems Vertical Marketing Systems -Producer + Wholesaler + Retailer = Unified system under channel captain - Corporate (single ownership), administered or contractual (independent firms)

33. Channel Integration and Systems Vertical Marketing Systems Horizontal - 2 or more unrelated Marketing Systems companies put together resources to exploit an emerging market

34. Channel Integration and Systems Vertical Marketing Systems - More marketing channels/ strategies of 1 Horizontal channel reflect the Marketing Systems strategies of other channels - Goal: maximum market Integrated Multichannel coverage Marketing Systems

36. • Channel Coordination – channel members are brought together to advance the goals of the channel

37. • Channel conflict - one member’s actions prevent another channel from achieving its goal * Can be vertical, horizontal or multichannel

39. * Online retailers provide convenient, informative and personalized experiences without: • Retail floor space • Staff • Inventory * Customer service is critical: no social interaction

40. E-Commerce Marketing Practices Pure-click Launched a website without any previous experience as a firm

41. E-Commerce Marketing Practices Pure-click Launched a website without any previous experience as a firm Brick-and-click - Existing companies with an added online site - Risk: conflict with offline intermediaries

Chapter 15 top 10 - designing and managing integrated marketing concepts

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Chapter 15 top 10 - designing and managing integrated marketing concepts