Target Markets and Channel Design Strategy PDF

8 CHAPTER Target Markets and Channel Design Strategy...

8 CHAPTER Target Markets and Channel Design Strategy 1 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives ① Importance of market variables ② Framework of market analysis ③ Market geography ④ Impact of market size ⑤ Market density’s effects ⑥ Influence of market behavior ⑦ Changes in market behavior 2 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part. Objective 1 Market Variables The target market’s needs and wants should drive the manner in which the channel manager shapes the design of the firm’s marketing channels. 3 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part. Objective 2 Framework for Market Analysis 4 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part. Objective 3 Market Geography Market geography refers to the geographical extent of markets and where they are located. Channel manager’s task: To evaluate market geography relative to channel structure to ensure that the structure is able to serve the markets effectively and efficiently. 5 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Locating Markets 6 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Tracking Changes in Market Geography In the U.S. Globally A high degree of mobility within Southeast Asian countries & the U.S. means that market former Eastern bloc countries geography changes frequently. of central & eastern Europe have become key locations. 7 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part. Objective 4 Market Size Market size refers to the number of buyers or potential buyers (consumer or industrial) in a given market. Channel manager’s task: When using Bucklin’s model for market size data, it is important also to consider the peculiarities of particular situations and other relevant variables. 8 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part. Objective 5 Market Density Market density refers to the number of buyers or potential buyers per unit of geographical area. This market dimension’s relationship to channel structure is illustrated in the concept of efficient congestion. 9 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Market Density & Channel Strategy (1 of 2) Congested (high-density) markets can promote efficiency in the performance of several basic distribution tasks, particularly those of transportation, storage, communication, and negotiation. 10 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Market Density & Channel Strategy (2 of 2) The opportunity to achieve a high level of customer access at low cost is higher in dense markets than in more dispersed ones. Manufacturers of a wide array of products seek out distributors and retailers that operate in dense markets. 11 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part. Objective 6 Market Behavior Market behavior consists of four Sub-dimensions: 1.When the market buys 2.Where the market buys 3.How the market buys 4.Who buys 12 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  When the Market Buys Implications for the channel manager: 1. Variations create peaks & valleys in the manufacturer’s production schedule. 2. He or she should attempt to select channel members who are in tune with these changing patterns. 13 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Where the Market Buys 1. Determined by the types of outlets from which final buyers choose to make their purchases 2. Determined by the location of those outlets Implications for the channel manager: 1. He or she should know where customers generally buy particular types of products 2. He or she should know whether these patterns may be changing. 14 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  How the Market Buys 1. Large quantities 1. Small quantities 2. Self-service 2. Assistance by 3. One-stop shopping salespeople 4. Impulse buying Versus 3. Buying from several stores 5. Cash 4. Extensive decision 6. Shopping at home making prior to purchase 7. Expending 5. Credit substantial effort 6. Shopping at stores 8. Demanding extensive service 7. Expending little effort 8. Demanding little service 15 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Who Buys (1 of 2) Who makes the physical purchase? Affects the type of retailers chosen in the consumer market May influence the kinds of channel members used to serve industrial markets 16 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Who Buys (2 of 2) Who decides to make the purchase? In context of family unit at consumer level Buying centers at industrial level 17 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Buying Centers Sets of people who participate in industrial buying decisions and who are responsible for the consequences resulting from the decision Users Influencers Deciders Approvers Buyers Gatekeepers 18 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part. Objective 7 Changes in Market Behavior 19 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Implications of Changes (1 of 7) Making a comeback in department and specialty store sectors due to increasing consumer demand for knowledgeable and helpful salespeople 20 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Implications of Changes (2 of 7) Consumers demanding membership in warehouse clubs (Sam’s Club) 21 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Implications of Changes (3 of 7) Shoppers are trying to save time and avoid the inconvenience of shopping at crowded stores and fighting traffic congestion 22 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Implications of Changes (4 of 7) Personal computers are a means for consumers to supplement their in-store shopping 23 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Implications of Changes (5 of 7) Car buyers demanding fewer hassles & confrontations typically common when buying a car 24 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Implications of Changes (6 of 7) Growing in all sectors, especially in industrial or B2B 25 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.  Implications of Changes (7 of 7) Kohl’s racetrack layout exposes customers to the maximum amount of merchandise in the shortest time. 26 ©2013 ©2013Cengage Cengage Learning. All Rights Learning. All Rights Reserved. Reserved.May Maynot notbebe scanned, scanned, copied copied or duplicated, or duplicated, or posted or posted to a publicly to a publicly accessibleaccessible website, inwebsite, whole orininwhole part. or in part.