09. marketing channels and managaing retails

THARAKA DIASMBA(USA), BBA(USA), Dip in Mgt, ACIM(UK),

FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia),

MSLIM

A marketing channel system is the

particular set of interdependent

organizations, involved in the process of

making a product or service available for making a product or service available for

use or consumption.

2AOT - www.tharakadias.com

� A push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to carry, promote, and sell the product to end users

� A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries


� Ability to order a product online and pick it up

at a convenient retail location

� Ability to return an online-ordered product to

a nearby storea nearby store

� Right to receive discounts based on total

online and offline purchases


� Gather information

� Develop and disseminate persuasive

communications

Reach agreements on price and terms� Reach agreements on price and terms

� Acquire funds to finance inventories

� Assume risks

� Provide for storage

� Provide for buyers’ payment of their bills

� Oversee actual transfer of ownership


� Analyze customer needs

� Establish channel objectives

� Identify major channel alternatives

Evaluate major channel alternatives� Evaluate major channel alternatives


Lot size

Waiting and delivery time

Spatial convenienceSpatial convenience

Product variety

Service backup


� Types of intermediaries

� Number of intermediaries

� Terms and responsibilities


� Price policy

� Condition of sale

� Distributors’ territorial rightsDistributors’ territorial rights

� Mutual services and responsibilities


� Selecting channel members

� Training channel members

� Motivating channel members� Motivating channel members

� Evaluating channel members

� Modifying channel members


Coercive

Reward

LegitimateLegitimate

Expert

Referent

AOT - www.tharakadias.com

� What types of conflict arise in channels?

� What causes conflict?

� What can marketers do to resolve it?


� Goal incompatibility

� Unclear roles and rights

� Differences in perception

Intermediaries’ dependence on manufacturer� Intermediaries’ dependence on manufacturer


Pure-click

Brick-and-click


Retailing encompasses the business activities

involved in selling goods and services to

consumers for their personal, family, or consumers for their personal, family, or

household use. It includes every sale to the

final consumer.


�How can we best serve our customers while

earning a fair profit?

�How can we stand out in a highly competitive

environment where consumers have too environment where consumers have too

many choices?

�How can we grow our business, while

retaining a core of loyal customers?


Retailers can best address these questions by

fully understanding and applying the basic

principles of retailing, as well as the elements

in a well-structured, systematic, and focused in a well-structured, systematic, and focused

retail strategy.


�Be a people person

�Be flexible

�Be decisive

Have analytical skills�Have analytical skills

�Have stamina


Manufacturer

Retailer

WholesalerFinal

Consumer


�A retailer sells to consumers through multiple

retail formats

�Web sites

�Physical stores


� Disagreements may occur:

�control over channel

�profit allocation

�number of competing retailers

�product displays

�promotional support

�payment terms

�operating flexibility


� Exclusive: suppliers make agreements with

one or few retailers that designate the latter

as the only ones in a specified geographic

area to carry certain brands or productsarea to carry certain brands or products

� Intensive: suppliers sell through as many

retailers as possible

� Selective: suppliers sell through a moderate

number of retailers


Small

Average

Sale

Impulse

Purchase

Retailer’s

Strategy

Popularity

of

Stores


�An overall plan for guiding a retail firm

�Influences the firm’s business activities�Influences the firm’s business activities

�Influences firm’s response to market

forces


Customer Orientation

Coordinated Effort

Value driven

Goal Orientation

Retailing

Concept

Retail

Strategy


� Activities undertaken by a retailer in

conjunction with the basic goods and

services it sells.

Store hours�Store hours

�Parking

�Shopper-friendliness

�Credit acceptance

�Salespeople


� Seek to establish and maintain long-term

bonds with customers, rather than act as if

each sales transaction is a completely new

encounterencounter

� Concentrate on the total retail experience

� Monitor satisfaction

� Stay in touch with customers


� Use a win-win approach

� It is harder to get new customers than to keep

existing ones happy

� Develop a customer database� Develop a customer database

� Ongoing customer contact is improved with

information on people’s attributes and shopping

behavior


Thank you

Thank you


09. marketing channels and managaing retails

Business