1. Oakley Inc.

, based in Foothill Ranch, California, is best known as a manufacturer

of high-end, avant-garde sunglasses, which it sells to the tune of over #300
million per year. It is also the company that donated sunglasses to all the miners
rescued in the Chile mine disaster of 2010. About one third of those sales are
made through the almost 2,000 stores of the Sunglass Hut chain of specialty
retailers. The channel relationship between Oakley and Sunglass Hut has been a
very good one. The slick Oakley sunglasses attract customers to Sunglass Hut, the
margins are high, and Oakley has a channel partner through which it could sell
literally tons of its sunglasses. But all this changed when Italian sunglass maker
Luxoticca Group SA acquired the Sunglass Hut chain. Luxoticca, which owns the
famous brand, Ray-Ban, immediately cut back orders of Oakley products to be
sold through Sunglass Hut stores to less than 20 percent of what they had been
prior to the acquisition. Clearly, Luxoticca wanted to move more of its own
products through Sunglass Hut, and so in the future Sunglass Hut would have
much less shelf space for Oakley products. Oakley’s profit projections and stock
prices dropped drastically on the news of this channel upheaval. Discuss Oakley’s
channel strategy from the possible downside of channel partnerships or strategic
alliances that it had with Sunglass Hut. How might Oakley’s channel strategy be
changed to mitigate this kind of problem in the future?
- In this situation, it seems likely that the Oakley Corporation is pursuing a
limited channel management approach in which very little or only one channel
participant is responsible for marketing the product to the end customer. The
company had good ties with its channel partner through the company, but still
lacked the requisite closeness with the members of its channel in Sunglass
Hut.
2. Marketing Channels should be designed to make products and services
conveniently available to the customers, how, when, and where they want them.
This is exactly what several franchises such as Cousins Submarines Inc., Tasti D-
Lite LLC frozen yogurt, Toppers Pizza Inc. intend to do by changing their
channel structures to include mobile channels consisting of fully equipped trucks
and vans that can bring many of the product sold in their bricks and mortar stores
right to customers where they work and play. How will potential customers know
when and where these truck and van mini-restaurants will appear? Simple
customers can track the whereabouts of the vendors by going to Facebook and
Twitter. Do you think this type of channel is just a novelty in fast-food channels
or does it have any potential to be a major force for change in the channel
structure of fast-food and other product and service distribution channels?
- Technological change has contributed to the creation of new delivery
networks. Marketing networks need to be based on making goods and services
affordable to consumers easily, how, where and when they want them. A
robust marketing plan helps the consumer to have the product on demand to
satisfy this food organisation, while the way social media is evolving it serves
as a modern distribution platform and I believe the fast food vans that use
social media platforms such as Facebook, Twitter, etc. it would be beneficial
to make buyers aware of their whereabouts and modify the way the sales
networks operate.