Rafia Distribution Stategies

8/3/2019 Rafia Distribution Stategies......

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MARKETING STRATEGY

6. Designing and managingIntegrated MarketingChannels


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WHAT IS A MARKETING CHANNEL?

A marketing channel system is theparticular set of interdependent organizationsinvolved in the process of making a product

or service available for use or consumption.

Marketing channels must not just markets, they mustalso markets


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CHANNELS AND

MARKETING DECISIONS

A push strategy uses the manufacturerssales force, trade promotion money, andother means to induce intermediaries to

carry, promote, and sell the product toend users

A pull strategy uses advertising,promotion, and other forms ofcommunication to persuade consumersto demand the product fromintermediaries


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BUYER EXPECTATIONS FOR

CHANNEL INTEGRATION

Ability to order a product online and pick it up at aconvenient retail location

Ability to return an online-ordered product to a

nearby store Right to receive discounts based on total online and

offline purchases

EX: CROSSWORD


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TYPES OF SHOPPERS

Service/quality customers

Price/value customers

Affinity customers-a tight bond between

customers and company ,when affinity ishigh cost of new product launch goesdown


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SHOULD THE 4 PS BE REPLACED?

Solutions

Information

Value Access


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INCREASING EFFICIENCY

DIRECT MARKETING

REDUCE THE NUMBER OF CONTACTS AND THE WORK


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CHANNEL MEMBER FUNCTIONS

Gather information

Develop and disseminate persuasivecommunications

Reach agreements on price and terms Assume risks

Provide for storage

Provide for buyers payment of their bills Oversee actual transfer of ownership


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FIGURE MARKETING CHANNEL FLOWS


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FIGURE

CONSUMER MARKETING CHANNELS


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FIGURE INDUSTRIAL

MARKETING CHANNELS


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DESIGNING A

MARKETING CHANNEL SYSTEM

Analyze customer needs

Establish channel objectives

Identify major channel alternatives Evaluate major channel alternatives


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CHANNEL SERVICE OUTPUTS

Lot size: the number of units the channelpermits a typical customer to purchase on oneoccasion

Waiting/delivery time: customers prefer faster

delivery channels Spatial convenience: customers prefer

convenience-BATA retail outlet

Product variety: customers prefer greater

assortment because more choices increasethe chance of finding their need Service backup: the add on services like

credit,delivery,installation,repairs provided bythe channel


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IDENTIFYING CHANNEL ALTERNATIVES

Types of intermediaries-SHGs,-OPERATIONSHAKTI,e-choupal

Number of intermediaries

Terms and responsibilities


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NUMBER OF INTERMEDIARIES

Exclusive-more dedicating andknowledgeable selling Involves limitingdistribution to a single outlet. The product isusually highly priced, and requires theintermediary to place much detail in its sell.

An example of would be the sale of vehiclesthrough exclusive dealers.

Selective-limited number of outlets orintermediariesShemaroovideos throughrental store,online,catalogs ,TITAN WATCHES

Intensive-PLACING the goods in as manyoutlets as possible- tobacco products, snackfoods, soap
http://en.mimi.hu/marketingweb/distribution.htmlhttp://en.mimi.hu/marketingweb/outlet.htmlhttp://en.mimi.hu/marketingweb/product.htmlhttp://en.mimi.hu/marketingweb/distribution.htmlhttp://en.mimi.hu/marketingweb/outlet.htmlhttp://en.mimi.hu/marketingweb/product.htmlhttp://en.mimi.hu/marketingweb/price.htmlhttp://en.mimi.hu/marketingweb/place.htmlhttp://en.mimi.hu/marketingweb/sale.htmlhttp://en.mimi.hu/marketingweb/vehicle.htmlhttp://en.mimi.hu/marketingweb/product.htmlhttp://en.mimi.hu/marketingweb/product.htmlhttp://en.mimi.hu/marketingweb/rough.htmlhttp://en.mimi.hu/marketingweb/rough.htmlhttp://en.mimi.hu/marketingweb/product.htmlhttp://en.mimi.hu/marketingweb/product.htmlhttp://en.mimi.hu/marketingweb/vehicle.htmlhttp://en.mimi.hu/marketingweb/sale.htmlhttp://en.mimi.hu/marketingweb/place.htmlhttp://en.mimi.hu/marketingweb/price.htmlhttp://en.mimi.hu/marketingweb/product.htmlhttp://en.mimi.hu/marketingweb/outlet.htmlhttp://en.mimi.hu/marketingweb/distribution.html


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FIGURE THE VALUE-ADDS VERSUS COSTS OF DIFFERENT

CHANNELS


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FIGURE BREAK-EVEN CHART FOR THE CHOICE BETWEEN A COMPANY SALES

FORCE AND WHOLESALERS SALES TEAM

company'ssales force

wholesaler's

agency

Sales cost

Volume of sales


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TERMS AND RESPONSIBILITIES

OF CHANNEL MEMBERS

Price policy-price lists, schedule ofdiscounts for intermediaries

Condition of sale-payment terms andproducer guarantees

Distributors territorial rights

Mutual services and responsibilities-McDonald's franchisees


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CHANNEL-MANAGEMENT DECISIONS

Selecting channel members

Training channel members

Motivating channel members

Evaluating channel members

Modifying channel members


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MOTIVATING-CHANNEL POWER

Coercive-manufacturer threaten to withdraw

relationship if intermediaries fail to co-operate

Reward-manufacturer offer intermediate anextra benefit for performing specific acts butintermediaries may ask for reward every timefor certain behavior

Legitimate-manufacturer requests a behaviorthat is warranted under the contract

Expert-the manufacturer has specialknowledge that the intermediaries value but ifthis expertise passed to intermediaries thenpower weakens

Referent-intermediaries are proud to be

associated with manufacturerIBM CATERPILLAR


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CHANNEL INTEGRATION AND SYSTEMS

Vertical marketing systems Corporate VMS-UNDER a single ownership-BPCL Administered VMS-co-ordinates successive stages of

production and distribution through the size and power ofone of the members-P&G

Contractual VMS-wholesaler sponsored voluntary chains,retailer co-operatives, franchise organizations Horizontal marketing systems-two or more unrelated

companies put together resources to exploit anemerging marketing opportunity-HLL with Pepsi for

Lipton's ready to drink and other beverages Multichannel systems-when a single firm uses 2 or

more marketing channels to reach one or morecustomer segments


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FIGURE : THE HYBRID GRID


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WHAT IS CHANNEL CONFLICT?

Channel conflictoccurs when one members

actions prevent another channel from achieving itsgoal.

Types of channel conflict Vertical-conflict between different levels within the same

channelsPETROLEUM COMPANIES on commission Horizontal-members with in the same level within the

channel-dealers in operation of area conflict

Multichannel -two or more channels that sell to the

same market-ESCORTS trying to create paralleldealership for a line of tractors in the early 1980s


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CAUSES OF CHANNEL CONFLICT

Goal incompatibility-manufacturer anddealer on profits

Unclear roles and rights-manufacturersales force and dealers sales force

servicing same territory-HP-personalcomputers

Differences in perception-manufacturermay be optimistic about the short term

economic outlook and wants dealers tocarry high inventory

Intermediaries dependence onmanufacturer-AUTO dealers on pricing


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TABLE STRATEGIES FOR MANAGING CHANNEL

CONFLICT

Adoption of super ordinategoals-joint goals of members

Exchange of employees-GMsdealer policy

Cooptation-support of otherorganizations leaders as a boardof directors

Diplomacy-to meet the counterpart to resolve the conflicts

Mediation-by neutral 3rd party Arbitration-to arbitrators- It is a

settlement technique in which athird party reviews the case andimposes a decision that is legallybinding for both sides

Legal recourse


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Marketing mix in E-MARKETING

PRODUCT: LIMITED LIFE OF THE PRODUCT

PRICE: CONSTANT INNOVATION INPRODUCTS,ONLINE SAVES COST,TIME

PLACE: SAFE DELIVERY OF GOODS,GLOBALISATION

PROMOTION: DIRECT INTERACTION BETWEEN

CONSUMERS AND SELLERS:


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brick and mortarbusinesses are

companies whichhave a physicalpresence (for

example, a buildingmade of bricks andmortar) which offerface-to-faceconsumerexperiences.
http://en.wikipedia.org/wiki/File:Ziegelmauer.jpg


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1.Ranbaxy

2.Nokia3.Samsung4.LG

5.Imax6.Indian railways7.Airlineskingfisher,JET,INDIGO


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B2B E-COMMERCE

SUPPLIER WEBSITES

Infomediaries-information aboutalternatives

Market makers-third parties create marketby linking buyers and sellers

Customer communities-websites where

buyers can swap stories about suppliersproducts and services


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TYPES OF E-COMMERCE

Documents

Rafia Distribution Stategies