Marketing Channel Delivering Customer Value Principles of Marketing PDF

Principles of Marketing Nineteenth Edition, Global Edition Chapter 12 Marketing Channels: Delivering Customer Value Copyright © 2024 Pearson Education Ltd...

Principles of Marketing Nineteenth Edition, Global Edition Chapter 12 Marketing Channels: Delivering Customer Value Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Learning Objectives 12.1 Explain why companies use marketing channels and discuss the functions these channels perform. 12.2 Discuss how channel members interact and how they organize to perform the work of the channel. 12.3 Identify the major channel alternatives open to a company. 12.4 Explain how companies select, motivate, and evaluate channel members. 12.5 Discuss the nature and importance of marketing logistics and integrated supply chain management. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Learning Objective 1 Explain why companies use marketing channels and discuss the functions these channels perform. Pictures A A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user(consumer) this also known as a distribution channel. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Supply Chains and the Value Delivery Network (1 of 3) Upstream partners are firms that supply raw materials, components, parts, information, finances, and expertise needed to create a product or service. Manufacturer Downstream partners include the marketing channels or distribution channels that look toward the customer, including retailers and wholesalers. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Supply Chains and the Value Delivery Network (3 of 3) Example : Ford Company Value delivery network: In making and marketing its lines of trucks, Ford manages a huge network of people within the company plus thousands of outside suppliers, dealers, and marketing service firms that work together to create and deliver value and the brand’s “Built Ford Tough” positioning. REUTERS/Rebecca Cook Copyright © 2024 Pearson Education Ltd. All Rights Reserved. The Nature and Importance of Marketing Channels (1 of 7) Marketing channel (distribution channel) Refer (Pic A) is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. The Nature and Importance of Marketing Channels (2 of 7) How Channel Members Add Value Transform the assortment of products into assortments wanted by consumers. Bridge the major time, place, and possession gaps that separate goods and services from users. Producers use intermediaries because they create greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operation, intermediaries usually offer the firm more than it can achieve on its own. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. The Nature and Importance of Marketing Channels (3 of 7) Figure 12.1 How a Distributor Reduces the Number of Channel Transactions Copyright © 2024 Pearson Education Ltd. All Rights Reserved. The Nature and Importance of Marketing Channels (4 of 7) How Channel Members Add Value Information Promotion Contact Matching Negotiation Physical distribution Financing Risk taking Copyright © 2024 Pearson Education Ltd. All Rights Reserved. The Nature and Importance of Marketing Channels (5 of 7) Number of Channel Levels Channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. Direct marketing channel is a marketing channel that has no intermediary levels. Indirect marketing channel is a marketing channel containing one or more intermediary levels. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. The Nature and Importance of Marketing Channels (6 of 7) Figure 12.2 Consumer and Business Marketing Channels Copyright © 2024 Pearson Education Ltd. All Rights Reserved. The Nature and Importance of Marketing Channels (7 of 7) Number of Channel Levels Channel members are connected by several types of flows: Physical flow of products Flow of ownership Payment flow Information flow Promotion flow Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Learning Objective 2 Discuss how channel members interact and how they organize to perform the work of the channel. The success of individual channel members depends on overall channel success, all channel firms should work together smoothly. They should understand and accept their roles, coordinate their goals and activities, and cooperate to attain overall channel goals. By cooperating, they can more effectively sense, serve, and satisfy the target market. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Behavior and Organization (11 of 13) Figure 12.4 Multichannel Distribution System Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Behavior and Organization (12 of 13) Multichannel Distribution Systems Multichannel distribution systems are systems in which a single firm sets up two or more marketing channels to reach one or more customer segments. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Behavior and Organization (13 of 13) Changing Channel Organization Disintermediation is the cutting out of marketing channel intermediaries by producers or the displacement of traditional resellers by new intermediaries. Disintermediation and disruption: Anghami and other innovative app- based music services are rapidly Timon Schneider/Alamy Stock Photo disintermediating conventional music distribution channels. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Discussion Question (1 of 2) How have changes in technology and online marketing affected marketing channels? Changes in technology and the explosive growth of direct and online marketing have had a profound impact on the nature and design of marketing channels. One major trend is toward disinter- mediation or channel disruption by which innovative new channels emerge to displace traditional ones. Companies must continually review, innovate, and update their channels or risk being left behind. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Learning Objective 3 Identify the major channel alternatives open to a company. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Design Decisions (1 of 8) Marketing channel design Designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Design Decisions (2 of 8) Analyzing consumer needs Setting channel objectives Identifying channel alternatives Evaluating channel alternatives Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Design Decisions (3 of 8) Analyzing Consumer Needs Find out what target consumers want from the channel Identify market segments Determine the best channels to use Minimize the cost of meeting customer service requirements fokke baarssen/Shutterstock Meeting customers’ channel service needs: Four Seasons Hotels and Resorts has perfected the art of high-touch, carefully crafted service. “If there’s a heaven, I hope it’s run by Four Seasons.” Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Design Decisions (4 of 8) Setting Channel Objectives Determine targeted levels of customer service Balance consumer needs against costs and customer price preferences Channel objectives: Responding to consumer trends in the Middle East, L’Oréal has overhauled its online shopping experience to reach consumers directly. Dmitry Larichev/Alamy Stock Photo Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Design Decisions (5 of 8) Identifying Major Alternatives Types of intermediaries refers to channel members available to carry out channel work. Most companies face many channel member choices. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Design Decisions (6 of 8) Identifying Major Alternatives Number of Marketing Intermediaries Intensive distribution Exclusive distribution Selective distribution Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Design Decisions (7 of 8) Identifying Major Alternatives Responsibilities of Channel Members A producer and the intermediaries need to agree on Price policies Conditions of sale Territory rights Specific services Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Learning Objective 4 Explain how companies select, motivate, and evaluate channel members. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Channel Management Decision Selecting channel members Managing channel members Motivating channel members Evaluating channel members Selecting channels: The channel feud between FedEx and Amazon risks damaging both Christopher Lee/Bloomberg via Getty Images companies’ opportunities while at the same time potentially inconveniencing their mutual customers. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Discussion Question (2 of 2) What are sustainable supply chains? Companies have many reasons for reducing the environmental impact of their supply chains. For one thing, if they don’t green up voluntarily, a host of sustainability regulations enacted around the world will soon require them to. For another, many large customers— from Walmart and Nike to the federal government—are demanding it. And most importantly, consumers are now demanding it. For example, one recent consumer survey found that 70 percent of North American consumers think it is important that a brand is sustain- able and eco-friendly. Thus, environmental sustainability has become an important factor in supplier selection and performance evaluation Copyright © 2024 Pearson Education Ltd. All Rights Reserved.