Marketing Channels - Module 1: Where Mission Meets Market
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Transcript of Marketing Channels - Module 1: Where Mission Meets Market
Marketing ChannelsModule 1: Where Mission Meets Market
Preparation for the Marketing Channels exam at Edinburgh Business SchoolContent extracted from the text book by Lou E. Pelton, Dr. David Strutton, and Dr. James R. Lumpkin
All pictures used for educational purposes only. No copyright infringement intended.
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1.1 The Elements of Successful Marketing Channels
To achieve success in a c o m p e t i t i v e a r e n a , members of relay teams must pool individual resources to achieve collective goals through a connected system. In addition, this connected system must be flexible enough to accommodate c h a n g e s i n t h e environment.
1.1 The Elements of Successful Marketing Channels
Pooled ResourcesDistributors acting as field operatives, talking with customers, straightening up cases on retail floors.
1.1 The Elements of Successful Marketing Channels
Collective GoalsA mission statement is an organization’s strategic charter
– a public declaration of why it exists.
1.1 The Elements of Successful Marketing Channels
Connected SystemOrganizations cannot exist without markets. All business
competition emerges within marketing channels.
1.1 The Elements of Successful Marketing Channels
Flexibility As Alderson put it, the organizations and persons involved in channel flows mus t be ‘ su ffi c i en t l y connected to permit the system to operate as a whole, but the bond they share must be loose enough t o a l l ow fo r components to be replaced or added.’
1.2
What is a Marketing Channel?
A marketing channel can be defined as an array of exchange relationships that create customer value in the acquisition, consumption,
and disposition of products and services. This definition implies that exchange relationships emerge from market needs as a way of serving
market needs.
1.3 Evolution of Marketing Channels
Marketing channels always emerge out of a demand that marketplace needs be better served.
Production Era &
Distributive Practices
Institutional Period & Selling
Orientation
The MarketingConcept
Relationship Marketing
Era
1.4 Channel Intermediaries: The Customer Value Mediators
Channel intermediaries are individuals or organizations who mediate exchange
utility in relationships involving two or
more partners.
Contactual Efficiency
Routinization
SortingMinimizingUncertainty
1.4 Channel Intermediaries: The Customer Value Mediators
Contactual Efficiency
1.4 Channel Intermediaries: The Customer Value Mediators
Contactual efficiency describes this movement toward a point of equilibrium between the quantity and quality of exchange relationships between channel members. When only two parties are involved in an exchange, the relationship is said to be a dyadic relationship.
1.4 Channel Intermediaries: The Customer Value Mediators
The Economost system represents the state of the art in routinization. Routinization refers to the means by which transaction processes are standardized to improve the flow of goods and services through marketing channels. Routinization itself delivers several advantages to all channel participants.
Routinization
1.4 Channel Intermediaries: The Customer Value Mediators
In a channels context, sorting is often described as a smoothing function. Two principal tasks are associated with the sorting function. They are: a) Categorizing b) Breaking Bulk
Sorting
1.4 Channel Intermediaries: The Customer Value Mediators
The role that intermediaries play in reducing uncertainty is perhaps their most overlooked function. Types of uncertainty are:Need Uncertainty: what is available vs what is neededMarket Uncertainty: # of sources available for a product or serviceTransaction Uncertainty: imperfect channel flows between buyers and sellers
MinimizingUncertainty
Facilitating Strategic Aims
1.4 Functions performed by Marketing Intermediaries
Fulfilling Interaction Requirements
1.4 Functions performed by Marketing Intermediaries
Satisfying Delivery and Handling Requirements
1.4 Functions performed by Marketing Intermediaries
Managing Inventory Requirements
1.4 Functions performed by Marketing Intermediaries
1.4 Channels Relationship Model (CRM)
The CRM provides a structure for
examining how an array of exchange relationships can create customer
value in the distribution of products and
services.
1.4 Channels Relationship Model (CRM)
Array of Exchange Relationships
1st interaction: within the marketing organization (intraorganizational)
2nd interaction: between marketing organizations (interorganizational)
3rd interaction: between marketing organizations and their environments
1.4 Channels Relationship Model (CRM)
Creating Customer ValueFor customers, marketing channels create
form,
possession, andplace,
time utilities.
1.4 Channels Relationship Model (CRM)
Products and Services FlowsAcquisitionConsumptionOutsourcingDisposition
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