Fluent Essays

Illustrate how a firm might cover small and medium-sized businesses with one channel strategy and large corporate customers with another channel path. Explain How an effective supply chain can create a Competitive Marketing Advantage 0 Chapter 10 Managing Business Marketing Channels © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. 12e The alternative paths to business market customers The critical role of industrial distributors and manufacturers’ representatives in marketing channels The central component of channel design Requirements for successful channel strategy Chapter Outline 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Channel structure must be designed to accomplish marketing objectives Business marketer must manage the channel to achieve prescribed goals once channel structure has been specified Dimensions of Channel Component © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Numerous alternatives Differences in marketing goals Need for separate and concurrent channels due to diverse business market segments Challenges in Selecting the Channel 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Link between the manufacturer and the customer Accomplishes all the tasks necessary to get the product/service to market Tasks can be performed by the manufacturer or be delegated throughout the channel Channel of Distribution 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Channel Tasks © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Making contact with potential buyers Negotiating Contracting Transferring title Communicating Arranging financing Servicing the product Providing local inventory, transportation, and storage Figure 10.1 - B2B Marketing Channels © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Large and well defined customers Customers insisting on direct sales Sales involving extensive negotiations Selling has to be controlled to: Ensure that total product package is properly implemented Guarantee a quick response to market conditions Complex product and sales opportunities and highly customized solutions Feasibility of Direct Sales Approach © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Need for Indirect Distribution © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Fragmented and widely dispersed markets Prevalence of low transaction amounts Purchase of a number of items in one transaction Figure 10.2 - Typical Sales Cycle: Tasks Performed Throughout the Sales Process © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 10.3 - Multichannel Integration Map: Simple Example of High-coverage Partnering Model © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Provide a valuable tool for: Coordinating sales channel activities Managing crucial connections and exchange between the activities Assist in IT-driven channel coordination with no loss of information Customer Relationship Management (CRM) Systems 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Participants in the Business Marketing Channel © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Industrial distributors Manufacturers’ representatives Small, independent businesses serving narrow geographic markets Full-service intermediaries who take title to the products they sell Most pervasive and heavily used for maintenance, repair, and operations (MRO) supplies Distributors 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Employ both inside and outside salespersons Outside - Making regular calls on customers and handling normal account servicing and technical assistance Inside - Taking telephone orders, processing orders, and scheduling delivery Larger distributors achieve operating economies Automating the operations to significantly reduce the sales and general administrative expenses Distributors (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Functions of Distributors © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Having products readily available Serving as manufacturer’s selling arm Providing credit Offering wide product assortments Delivering goods Offering technical advice Meeting emergency requirements Services Provided by Distributors 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Supply chain and inventory management Automatic replenishment Product assembly In-plant stores Design services Classification of Distributors © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. General-line distributors Stock an extensive variety of products Specialists Focus on one line or on a few related lines Combination house Operates in industrial and consumer markets Depends on the manufacturer’s requirements and the needs of target customer segments General-line distributor offers the advantage of one-stop purchasing Specialist provides the manufacturer with a high level of technical capability and a well-developed understanding of complex customer requirements E-collaboration - Critical strategic force in the managing channel relationships Choosing a Distributor 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Work independently Represent several companies in the same geographic area Sell noncompeting but complementary products Have expert product knowledge combined with a keen understanding of the markets and customer needs Give the business marketer more control as the firm maintains title and possession of the goods Manufacturers’ Representatives 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Act as manufacturers’ selling arm Making contact with customers Writing and following up on orders Linking the manufacturer with the industrial end users Offer technical advice while enhancing the customer’s leverage with suppliers Are paid a commission on sales Develop their field experience while working as salespersons for manufacturers Manufacturers’ Representatives (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. In small, medium-sized, and large firms In conditions of limited market potential To service distributors when a manufacturer sells through hundreds of distributors To reduce overhead costs Need for Manufacturers’ Reps 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Different market segments require different channel structures Distinct approaches Large accounts are called on by the firm’s own sales force Distributors handle small repeat orders Manufacturers’ reps develop the medium-sized firm market Differences in purchase behavior Factors Influencing the Choice of Intermediaries © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Dynamic process of developing new channels where none existed and modifying existing channels Best conceptualized as a series of stages that the business marketing manager must complete Specifies the structure that provides the highest probability of achieving the firm’s objectives Focuses on channel structure Channel Design © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Refers to the underlying framework Number of channel levels Number and types of intermediaries Linkages among channel members Channel Structure © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 10.4 - Channel Design Process © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Figure 10.5 - Customers Drive the Channel Design Process © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Selecting good channel participants and making sure that all tasks and obligations are assigned and understood Motivating members to perform tasks necessary to achieve channel objectives Controlling inter-channel conflict Controlling and evaluating performance Channel Administration Process 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Ongoing process Through one of the following options Discussions with company salespeople and existing or potential customers Trade sources Selection of Channel Members © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Beginning with the understanding that the channel relationship is a partnership Developing a trusting relationship with the reps Improving communication through recognition programs, product training, and consultation Informing the reps of plans, detailing objectives, and providing positive feedback Specifying the cooperative efforts each firm requires of its partner Motivating Channel Members 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Bringing in distributors or reps for the purposes of: Reviewing distribution policy Developing marketing strategy Supplying industry intelligence Providing compensation policies that meet industry and competitive standards Motivating Channel Members (continued) 0 © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Ways to Control Conflict © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use. Channel-wide committees Joint goal setting Cooperative programs involving a number of marketing strategy elements Effectively cooperating within the channel Offering benefits and resources that are superior to what other partners could offer Aligning oneself with other firms that have similar corporate values Sharing valuable information on expectations, markets, and performance Refraining from taking advantage of one’s partners Building Trust and Commitment © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.