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Conventional Marketing Channel

Conventional marketing channel have been loose connections of independent companies, each showing little concern for overall channel performance. They have lacked strong leadership and have been troubled by damaging conflict and poor performance. A conventional marketing channel consists of one or more independent producers, wholesalers and retailers. Each is a separated business seeking to maximise its own profits, even at the expense of profits for the network as a whole. No channel members has much control over the other members, and no formal means exist for assigning roles and resolving channel conflict. Vertical marketing network VMN A distribution channel structure in which producers, wholesalers and retailers act as a unified network - either one channel member owns the others, has contracts with them, or wield so much power that they all cooperate.

Marketing Channels - Presentation Transcript 1. Chapter 16 Selecting and Managing Marketing Channels Marketing Management Tenth Edition Philip Kotler 2. Objectives
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Work Performed by Marketing Channels Channel-Design Decisions Channel-Management Decisions Channel Dynamics

3. How a Distributor Reduces the Number of Channel Transactions = Customer = Manufacturer A. Number of contacts without a distributor M xC=3X3=9132456789

4. How a Distributor Reduces the Number of Channel Transactions = Distributor = Customer = Manufacturer B. Number of contacts with a distributor M x C = 3 + 3 = 6 Store 1 2 3 4 5 6 5. Distribution Channel Functions Ordering Payments Communication Transfer Negotiation Financing Risk Taking Physical Distribution Information 6. Consumer Consumer Marketing Channels Wholesaler Jobber Retailer Consumer Manufacturer 0-level channel Wholesaler RetailerRetailer Consumer Mfg 2-level channel Mfg 3-level channel 1-level channel Consumer Manufacturer 7. Industrial Marketing Channels Industrial distributors Manufacturer Consumer Manufacturers representative Manufacturers sales branch 8. Customers Desired Service Levels
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Lot size Waiting time Spatial convenience Product variety Service backup

9. Break-Even Cost Chart Selling costs (dollars) Level of sales (dollars) Company sales force Manufacturers sales agency S B 10.Channel Management Decisions Selecting FEEDBACK Motivating Training Evaluating 11.Types of Vertical Marketing Systems Corporate Common Ownership at Different Levels of the Channel Contractual Contractual Agreement Among Channel Members Administered Leadership is Assumed by One or a Few Dominant Members 12.Conventional Distribution Channel vs. Vertical Marketing Systems Vertical marketing channel Manufacturer Retailer Conventional

marketing channel Manufacturer Wholesaler Consumer Consumer Retailer Wholesaler 13.Causes of Channel Conflict
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Incompatibility Difference in Perception Dependence

14.Legal & Ethical Issues in Channel Relations


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Exclusive Dealing Exclusive Territories Tying Agreements Dealers Rights

15.Review
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Work Performed by Marketing Channels Channel-Design Decisions Channel-Management Decisions Channel Dynamics

E-Marketing
Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. However, the term is usually used to refer to:

sending email messages with the purpose of enhancing the relationship of a merchant with its current or previous customers, to encourage customer loyalty and repeat business,

sending email messages with the purpose of acquiring new customers or convincing current customers to purchase something immediately,

adding advertisements to email messages sent by other companies to their customers, and

sending email messages over the Internet, as email did and does exist outside the Internet (e.g., network email and FIDO).

Researchers estimate that United States firms alone spent US $400 million on email marketing in 2006.[ There are both advantages and disadvantages to using email marketing in comparison to traditional advertising mail.

E-Purchasing
The implications for e-purchasing Online auctions and exchanges have played an important role in the growth of e-purchasing within businesses of all sizes and types. E-procurement There are two parts to the e-purchasing cycle - the more established of which is e-procurement. This has been developed in recent years to deal with the process element of electronic purchasing. E-procurement is the use of the internet to operate the transactional aspects of requisitioning, authorising, ordering, receipting and payment processes for the required products or services. A number of e-marketplaces offer transaction services that automate many aspects of the procurement cycle for both the buyer and the seller. E-procurement covers the following areas of the buying process:

requisition against order authorisation order receipt payment

Focus group
A focus group is a form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept, advertisement, idea, or packaging.[1] Questions are asked in an interactive group setting where participants are free to talk with other group members. The first focus groups were created at the Bureau of Applied Social Research in the USA, by associate director, sociologist Robert K. Merton.[2] The term itself was coined by psychologist and marketing expert Ernest In marketing I n the world of marketing, focus groups are seen as an important tool for acquiring feedback regarding new products, as well as various topics. In particular, focus groups allow companies wishing to develop, package, name, or test market a new product, to discuss, view, and/or test the new product before it is made available to the public. This can provide invaluable information about the potential market acceptance of the product. Focus Group is an interview, conducted by a trained moderator among a small group of respondents. The interview is conducted in an unstructured and natural way where respondents are free to give views from any aspect.

Marketing plan
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use. The marketing planning process Marketing process can be realized by the marketing mix in step 4. The last step in the process is the marketing controlling. In most organizations, "strategic planning" is an annual process, typically covering just the year ahead. Occasionally, a few organizations may look at a practical plan which stretches three or more years ahead. To be most effective, the plan has to be formalized, usually in written form, as a formal "marketing plan." The essence of the process is that it moves from the general to the specific, from the vision to the mission to the goals to the corporate objectives of the organization, then down to the individual action plans for each part of the marketing program. It is also an interactive process, so that the draft output of each stage is checked to see what impact it has on the earlier stages, and is amended.

Marketing Public Relations


Once upon a time, people became familiar with marketing through their experiences as a consumer. As time passed awareness grew through exposure to a plethora of media. Today, we are savvy consumers and masters of media, who find it second nature to create our own media or to interact electronically with companies and their brands. Subsequently, the demand for people skilled in marketing through both traditional and new methods is in ever increasing demand. Despite the growing importance of public relations and new media to businesses that are facing this new marketing reality, very few colleges and universities have been addressing these subjects from a business point of view. This text breaks from the norm by presenting public relations from a marketing rather than a communications studies or journalism perspective. Whats more, it recognizes the similarities between PR, word-of-mouth, and social media, and creates a framework for constructing business and marketing strategies that incorporate these highly credible and cost effective tools. During the course of your lifetime, you have seen technology change the way that we communicate, and that change in communication has transformed the practice of marketing. In fact, these forces are so strong that we are witnessing a convergence of new and traditional media that will undoubtedly shape the media landscape of the future. We call the place where new and traditional media meet to publicize businesses, brands, people and ideas Marketing Public Relations (MPR). MPR is now the most powerful method of promoting products, services, and ideas. In essence, this book provides the basis for turning what you know about being a consumer of products and media into a skill that is in demand by a growing number of companies around the globe.

Marketing research
Marketing Research is " the function that links the consumer, customer, and public to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications."[1] Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing products and services. The goal of marketing research is to identify and assess how changing elements of the marketing mix impacts customer behavior. The term is commonly interchanged with market research; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while marketing research is concerned specifically about marketing processes.[2] Marketing research is often partitioned into two sets of categorical pairs, either by target market:

Opinion leader
Opinion leadership is a concept that arises out of the theory of two-step flow of communication propounded by Paul Lazarsfeld and Elihu Katz. This theory is one of several models that try to explain the diffusion of innovations, ideas, or commercial products. The opinion leader is the agent who is an active media user and who interprets the meaning of media messages or content for lower-end media users. Typically the opinion leader is held in high esteem by those who accept his or her opinions. Opinion leadership tends to be subject specific, that is, a person that is an opinion leader in one field may be a follower in another field. An example of an opinion leader in the field of computer technology, might be a neighborhood computer service technician. The technician has access to far more information on this topic than the average consumer and has the requisite background to understand the information, though the same person might be a follower at another field (for example sports) and ask others for advice. In his article "The Two Step Flow of Communication" by Elihu Katz, he found opinion leaders to have more influence on people's opinions, actions, and behaviors than the media. Opinion leaders are seen to have more influence than the media for a number of reasons. Opinion leaders are seen as trustworthy and non-purposive. People do not feel they are being tricked into thinking a certain way about something from someone they know. However, the media can be seen as forcing a concept on the public and therefore less influential. While the media can act as a reinforcing agent, opinion leaders have a more changing or determining role in an individuals opinion or action.

Overall Market Share


Market share, in strategic management and marketing is, according to Carlton O'Neal, the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company's sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company's unit sales volume (in a market) divided by the total volume of units sold in that market. It is generally necessary to commission market research (generally desk/secondary research) to determine. Sometimes, though, one can use primary research to estimate the total market size and a company's market share. Increasing market share is one of the most important objectives of business. The main advantage of using market share as a measure of business performance is that it is less dependent upon macroenvironmental variables such as the state of the economy or changes in tax policy. However, increasing market share may be dangerous for makers of fungible hazardous products, particularly products sold into the United States market, where they may be subject to market share liability. Market share refers to the relative market adoption of various products, for example:

Strategic Marketing Plan


The information for this article was derived from many sources, including Michael Porter's book Competitive Advantage and the works of Philip Kotler. Concepts addressed include 'generic' strategies and strategies for pricing, distribution, promotion, advertising and market segmentation. Factors such as market penetration, market share, profit margins, budgets, financial analysis, capital investment, government actions, demographic changes, emerging technology and cultural trends are also addressed.

There are two major components to your marketing strategy:


how your enterprise will address the competitive marketplace how you will implement and support your day to day operations.

In today's very competitive marketplace a strategy that insures a consistent approach to offering your product or service in a way that will outsell the competition is critical. However, in concert with defining the marketing strategy you must also have a well defined methodology for the day to day process of implementing it. It is of little value to have a strategy if you lack either the resources or the expertise to implement it.

In the process of creating a marketing strategy you must consider many factors. Of those many factors, some are more important than others. Because each strategy must address some unique considerations, it is not reasonable to identify 'every' important factor at a generic level. However, many are common to all marketing strategies. Some of the more critical are described below.

References
1. ^ DMA: "The Power of Direct Marketing: ROI, Sales, Expenditures and Employment in the U.S., 2006-2007 Edition", Direct Marketing Association, October 2006 2. ^ "New Survey Data: Email's ROI Makes Tactic Key for Marketers in 2009 ", MarketingSherpa, January 21, 2009 3. ^ Pew Internet & American Life Project, "Tracking surveys", March 2000 March 2007 4. ^ MediaWeek: UK e-mail marketing predicted to rise 15% MediaWeek.co.uk 5. ^ dotMailer, 2011, Article:"10 Benefits of Email Marketing" 6. ^ Return Path's Reputation Benchmark Report: "5 ways to increase deliverability", BtoB Magazine, July 2008 7. ^ The CAN-SPAM Act of 2003 online at ftc.gov or PDF Version 8. ^ a b Fairhead, N. (2003) All hail the brave new world of permission marketing via email (Media 16, August 2003) 9. ^ Dilworth, Dianna. (2007) Ruth's Chris Steak House sends sizzling e-mails for special occasions, DMNews retrieved on February 19, 2008 10. ^ O'Brian J. & Montazemia, A. (2004) Management Information Systems (Canada: McGraw-Hill Ryerson Ltd.) 11. ^ Full text of Privacy and Electronic Communications (EC Directive) Regulations 12. ^ FTC Approves New Rule Provision Under The CAN-SPAM Act