Chapter 3 The Environment of Marketing Channels. The Environment 3 Objective 1: Consists of all...
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Transcript of Chapter 3 The Environment of Marketing Channels. The Environment 3 Objective 1: Consists of all...
![Page 1: Chapter 3 The Environment of Marketing Channels. The Environment 3 Objective 1: Consists of all external uncontrollable factors within which marketing.](https://reader036.fdocuments.in/reader036/viewer/2022062314/56649e625503460f94b5e7aa/html5/thumbnails/1.jpg)
Chapter 3Chapter 3
The Environment of Marketing Channels
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The EnvironmentThe Environment 33
Objective 1:
Consists of all externaluncontrollable factors within
which marketing channels exist
Affects channel members and nonmembers, such as facilitating
agencies =
All channel participants
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33
Nonmember participants
The EnvironmentThe Environment
Environment
1. Economic2. Sociocultural3. Competitive4. Technological5. Legal
Producers& Manufacturers
Intermediaries
Target Markets
Facilitatingagencies
Memberparticipants
Locus ofchannel
management
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33The Economic EnvironmentThe Economic Environment
Objective 2:
Major EconomicForces
Recession Inflation
Deflation
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33RecessionRecession
Consumer and/orCorporate
spending
=
Channelstrategy: Manufacturers provide channel
member support by financing high inventory costs
Reduced sales volume
Reduced profitability
Firms caught with large
inventories
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33InflationInflation
Continued high spendingOR
Spending, fueling a recession
Possible channel strategy:• Reduce manufacturer’s product mix from higher-price to lower-price products• Reduce inventory burden on members with:
Streamlined product lineFaster order processing & deliveryHigher inventory turnover through
stronger promotional support
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33DeflationDeflation
Prices
Challenge:Pass cost-induced price increases through channelwhen built-in cost pressures from labor contracts
were negotiated several years earlier
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33Other Economic FactorsOther Economic Factors
Real interest
rates
Demand
Costs
=
1. 2.Strong U.S. Dollar
Difficult to sellproducts throughchannel members
= U.S. products less competitive
Objective 3:
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The Competitive The Competitive EnvironmentEnvironment
33Objective 4:
Global in scope
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33
Types of CompetitionTypes of CompetitionObjective 5:
Horizontal
Intertype
Vertical
Channel System
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33
Horizontal CompetitionHorizontal Competition
M
W
R R
W
M
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Intertype CompetitionIntertype Competition 33
M
W
R
M
W
R
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33Vertical CompetitionVertical Competition
M
R
W
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33Channel System CompetitionChannel System Competition
M
M
M
M
M
M
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33The Sociocultural The Sociocultural
EnvironmentEnvironment
Objective 6:
Pervades all aspects of a societyPervades all aspects of a society
Influences both national and international
marketing channels
Influences both national and international
marketing channels
Influences wide variations among channel structures worldwide
Influences wide variations among channel structures worldwide
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Sociocultural DevelopmentsSociocultural Developments 33
Population Age Patterns
Ethnic Mix
Educational Trends
Family or Household Structure
U.S. pop. Becoming both younger & older # of minority-owned businesses Levels = people more demanding Smaller & more varied
Role of Women # = changing shopping needs
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The Technological EnvironmentThe Technological Environment33Objective 7:
Help retailers & wholesalers closely monitor success orfailure of products they handle
ScannersComputerized inventory management
& Portable computers
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The Technological EnvironmentThe Technological Environment33
EDI - Electronic Data
Interchange
• Links together channel information systems• Provides real-time responses• Enhanced by Internet
= Enhanced
Distribution Efficiency
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The Technological EnvironmentThe Technological Environment 33
Acceleratingtechnology
“Computer salesPeople”
Mobilerobots 3-D
modeling
Ultra-widebandtechnology
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33
The Legal EnvironmentThe Legal Environment
The set of laws that impact marketing channels
Objective 8:
• Continually evolving • Affected by changing values, norms, politics,
& precedents• Knowledge of basics helps channel manager
avoid serious & costly legal problems
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Legislation Affecting Marketing Legislation Affecting Marketing ChannelsChannels
33
Sherman Antitrust Act 1890; Fundamental antimonopoly law
Public welfare best served through competition
Clayton Act 1914; Strengthen Sherman Antitrust Act
Prohibits specific practices among competing firms
Federal Trade Commission Act 1914; Established FTC
Power to investigate & enforce
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33Legislation Affecting Marketing Legislation Affecting Marketing ChannelsChannels
Robinson-Patman Act 1936; Amendment to Clayton Act
Prohibits price discrimination Allows price differentials to different customers
under specific circumstances
Celler-Kefauver Act 1950; Amendment to Clayton Act
Prohibits vertical mergers & acquisitions
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Legal Issues in Channel Legal Issues in Channel ManagementManagement
33Objective 9:
• Dual Distribution, or multi-channel distributionProducer or manufacturer uses 2 or more different channel
structures for distributing the same product• Exclusive Dealing
Supplier requires its channel members to sell only its products or to refrain from selling directly to competitive suppliers
•Full-Line ForcingSupplier requires channel members to carry a full-line of its products
in order to sell any particular products in supplier’s line
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Legal Issues in Channel Legal Issues in Channel ManagementManagement
33
• Price DiscriminationSupplier sells at different prices to the same class of channel
members• Price Maintenance
Supplier dictates prices charged by channel members to their customers
• Refusal to DealSupplier has right to refuse to deal with whomever they want as
channel members
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Legal Issues in Channel Legal Issues in Channel ManagementManagement
33
• Resale RestrictionsManufacturer attempts to stipulate to whom and in what geographical
market channel members may resell the manufacturer’s products• Tying Agreements
Supplier sells a product to a channel member on condition that the channel member also purchase another product
• Vertical IntegrationFirm owns and operates organizations at other levels of the
distribution channel