MKTM503 MKT501 MARKETING MANAGEMENT

Managing retailing, wholesaling and logistics

MKT501 MARKETING MANAGEMENT

Learning Outcomes MKT501 MARKETING MANAGEMENT

After this session, you will be able to:

stinctive Characteristics of Services
• Develop and implement effective
distribution strategies.

• Identify challenges and opportunities

in management of distribution
channels

• Manage power and conflict in

distribution systems

MKT501 MARKETING MANAGEMENT

Marketing Channels MKT501 MARKETING MANAGEMENT

Sets of interdependent organizations

involved in the process of making
a product or service available
for use
or consumption.

Marketing Channel
Producer Consumers
Intermediaries

MKT501 MARKETING MANAGEMENT

Why channel is important? MKT501 MARKETING MANAGEMENT

Ultimate Selling Price

30% - 50% 5% - 7%
Channel Members Advertising

MKT501 MARKETING MANAGEMENT

Intermediaries MKT501 MARKETING MANAGEMENT

Some intermediaries buy, take title to, and re-sell the

Merchants merchandise

Brokers, manufacturers’ representatives, sakes

Agents agents search for customers & may negotiate on
producers behalf but do not take title to the goods.

Transportation companies, independent

Facilitators warehouses, banks assist in distribution but neither
take title nor negotiate purchase.

MKT501 MARKETING MANAGEMENT

Channels and Marketing Decisions
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PUSH
STRATEGY

PULL
STRATEGY

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Conventional Channel MKT501 MARKETING MANAGEMENT

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 Hybrid Channels or Multichannel Marketing
MKT501 MARKETING MANAGEMENT

• Today, with the proliferation of customer segments and channel

possibilities, more and more companies have adopted multichannel
distribution systems - often called hybrid marketing channels.

• Channel integration – order a product online and pick it up at a

convenient retail location

MKT501 MARKETING MANAGEMENT

Multichannel…… MKT501 MARKETING MANAGEMENT

Multichannel……

23-10

MKT501 MARKETING MANAGEMENT

Multichannel…… MKT501 MARKETING MANAGEMENT

Example……

23-11

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Marketing Channel Flows MKT501 MARKETING MANAGEMENT

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Marketing Channel Levels - Consumer
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Marketing Channel Levels - Industrial
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 Reverse Channel MKT501 MARKETING MANAGEMENT

- To reuse products or containers

- To refurbish for resale
- To recycle
- To dispose of products or pacakaging

Also used for product recalls or for

broken products that need to be fixed
under Warranty - especially cars, tires
and some expensive electronic
consumer items.
MKT501 MARKETING MANAGEMENT
Marketing Channel Efficiency MKT501 MARKETING MANAGEMENT

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Channel Design Decisions MKT501 MARKETING MANAGEMENT

Lot size
Waiting/delivery time

Spatial convenience

Product variety
Service backup

MKT501 MARKETING MANAGEMENT

Channel Design Decisions MKT501 MARKETING MANAGEMENT

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Identify Channel Types MKT501 MARKETING MANAGEMENT

Intensive Exclusive Selective

Distribution Distribution Distribution

Levi’s Women’s
503 Jeans

Bonn Bread Hermes opened Sony, Samsung,

its first exclusive LG electronic
boutique store at goods
Oberoi hotel
MKT501 MARKETING MANAGEMENT
Channel Design Decisions MKT501 MARKETING MANAGEMENT

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The Value-Adds Vs Costs of Different Channels
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Channel-Management Decisions
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Selecting channel members

Training channel members

Motivating channel members

Evaluating channel members

Modifying channel members

Global Channel Considerations

MKT501 MARKETING MANAGEMENT
Bases of Power for Channel Control
MKT501 MARKETING MANAGEMENT

• Coercive power is based on perception held by channel member

that another group has the ability to inflict punishment

• Reward power is based on perception held by channel member that

another group has the ability to provide rewards for varying
performances.

• Legitimate Power is based on perception held by channel member

that another group has the right to influence the formers action.

• Referent Power is based on perception held by channel member that

another group should be identified with as copying the latter style,
beliefs and actions.

• Expert Power is based on perception held by channel member that

another group should be identified with latter’s knowledge and
expertise.

MKT501 MARKETING MANAGEMENT

Channel Integration and Systems
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Vertical Marketing system (VMS)MKT501 MARKETING MANAGEMENT

Consists of producers, wholesalers, and retailers acting

as a unified system. One channel member owns the
others, has contracts with them, or wields so much
power they must all cooperate

MKT501 MARKETING MANAGEMENT

 Causes of Channel Conflict MKT501 MARKETING MANAGEMENT

• Causes of Conflict
– Role Incongruities
– Resource Scarcities
– Perceptual Differences
– Expectational Differences
– Decision Domain Disagreements
– Goal Incompatibilities
– Communication Difficulties

MKT501 MARKETING MANAGEMENT

Managing Channel Conflict MKT501 MARKETING MANAGEMENT

• Strategic Justification
• Dual Compensation
• Adoption of superordinate goals
• Employee Exchange
• Joint membership
• Diplomacy, mediation & Arbitration
• Legal recourse

MKT501 MARKETING MANAGEMENT

e-Commerce Marketing Practices
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• Pure-click
• Brick-and-click
• Brick-and-mortar

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 New Retail Environment MKT501 MARKETING MANAGEMENT

• New retail forms and combinations

• Competition between store-based

and non-store-based retailing
• Growth of giant retailers

• Decline of middle market retailers

• Growing investment in technology

• Global profile of major retailers
• Growth of shopper marketing

MKT501 MARKETING MANAGEMENT

 Retailing MKT501 MARKETING MANAGEMENT

• All the activities in selling goods or

services directly to final consumers
for personal, nonbusiness use.

• Any organization selling to final

consumer is doing retailing. It does
not matter how and where the
goods or services are being sold.

MKT501 MARKETING MANAGEMENT

 Types of Retailers MKT501 MARKETING MANAGEMENT

• Store Retailers
Specialty store Narrow Product Line-The Body Shop, Tanishq

Department store Several Product Lines, JC Penny, Shoppers Stop

Large store designed to meet total needs for food

Supermarket
and household products-Safeway, HyperCITY

Convenience store Small stores in residential areas-7 Eleven,

Drug store Religare, Health & Glow

Discount store Wal-Mart, K-Mart

Extreme value or hard-discount

99 Store, Dollar Store, Big Bazzar
store

Leftover goods, overruns, irregular merchandise

Off-price retailer
sold at less than retail-Factory outlets
Superstore Staples, Carrefour

Catalog showroom Inside Edge Ski and Bike

MKT501 MARKETING MANAGEMENT
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• Non Store Retailers

– Direct Selling: Door to Door, Multilevel Marketing
– Direct Marketing: Direct Mail, telemarketing, television direct
response marketing and electronic shopping
– Automatic Vending

MKT501 MARKETING MANAGEMENT

 Retailers’ Marketing DecisionsMKT501 MARKETING MANAGEMENT

• Target market • Store atmosphere

• Product assortment • Store activities

• Procurement • Store experiences

• Prices • Communications

• Services • Location

MKT501 MARKETING MANAGEMENT

 Wholesaling Functions MKT501 MARKETING MANAGEMENT

All the activities in selling goods and services to those who buy for
resale or business use.

• Selling and promoting

• Warehousing
• Transportation
• Financing
• Risk bearing
• Market information
• Management services and counseling

MKT501 MARKETING MANAGEMENT

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Any Questions?

MKT501 MARKETING MANAGEMENT