Marketing Channels and Value Networks

Most producers do not sell their goods directly to the final users; between them stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel (also called a trade chan­nel or distribution channel). Formally, marketing channels are sets of interdependent organizations participating in the process of making a product

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The Role of Marketing Channels

Why does a producer delegate some of the selling job to intermediaries, relinquishing control over how and to whom its products are sold? Through their contacts, experience, specialization, and scale of operation, interme­diaries make goods widely available and accessible to target markets, offering more effectiveness and efficiency than the selling firm could achieve on

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Channel-Design Decisions

To design a marketing channel system, marketers analyze customer needs and wants, establish channel objectives and constraints, and identify and evaluate major channel alternatives. 1. ANALYZING CUSTOMER NEEDS AND WANTS Consumers may choose the channels they prefer based on price, product assortment, and convenience as well as their own shopping goals (economic, social, or

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Channel-Management Decisions

After a company has chosen a channel system, it must select, train, motivate, and evaluate intermediaries for each channel. It must also modify channel design and arrangements over time, including the possibility of expansion into international markets. 1. SELECTING CHANNEL MEMBERS To customers, the channels are the company. Consider the negative impression customers would

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Channel Integration and Systems

Distribution channels don’t stand still. We’ll look at the recent growth of vertical, horizontal, and multichannel marketing systems. After considering some e-commerce and m-commerce issues, we next examine how these systems cooperate, conflict, and compete. 1. VERTICAL MARKETING SYSTEMS A conventional marketing channel consists of an independent producer, wholesaler(s), and retailer(s). Each is a

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E-Commerce Marketing Practices

E-commerce uses a Web site to transact or facilitate the sale of products and services online. Online retail sales have exploded, and it is easy to see why. Online retailers can predictably provide convenient, informative, and personalized experiences for vastly different types of consumers and businesses. By saving the cost of retail floor space,

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M-Commerce Marketing Practices

Mobile channels and media can keep consumers as connected and interacting with a brand as they choose. By mid-2013, more than half of all online U.S. buyers had made a purchase on a mobile device, and m-commerce accounted for more than 11 percent of all e-commerce.81 Tablets are expected to overtake smart phones for

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Conflict, Cooperation, and Competition

No matter how well channels are designed and managed, there will be some conflict, if only because the interests of independent business entities do not always coincide. Channel conflict is generated when one channel member’s actions prevent another channel member from achieving its goal. Software giant Oracle Corp., plagued by conflict between its high-powered

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MARKETING EXCELLENCE Amazon.com

Founded by Jeff Bezos in 1995, Amazon.com started as the “world’s largest bookstore” and, ironically, owned no books. Bezos promised to revolutionize retailing, however, and over the years he has blazed a trail of e-commerce innovations that many executives have studied and companies have followed. Amazon initially set out to create personalized store­fronts for

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MARKETING EXCELLENCE TESCO

Tesco’s main purpose is to earn a customer’s lifetime I oyalty by creating value. To achieve this goal, the company has adopted the values of understanding cus­tomers, being the first to meet their needs, and acting responsibly in the communities they serve. Tesco was founded in 1919 by Jack Kohen, who began to sell

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The nature of retailing and marketing retailing

Retailing includes all the activities in selling goods or services directly to final consumers for personal, nonbusi­ness use. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Any organization selling to final consumers—whether it is a manufacturer, wholesaler, or retailer—is doing retailing. It doesn’t matter how the

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Private Labels in retailing

A private-label brand (also called a reseller, store, house, or distributor brand) is a brand that retailers and whole­salers develop. Benetton, The Body Shop, and Marks & Spencer carry mostly own-brand merchandise. In grocery stores in Europe and Canada, store brands account for as much as 40 percent of the items sold. In Britain,

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The Nature of wholesaling

Wholesaling includes all the activities in selling goods or services to those who buy for resale or business use. It excludes manufacturers and farmers because they are engaged primarily in production, and it excludes retailers. The major types of wholesalers are described in Table 18.4. Wholesalers (also called distributors) differ from retailers in a

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Market Logistics

Physical distribution starts at the factory. Managers choose a set of warehouses (stocking points) and transporta­tion carriers that will deliver the goods to final destinations in the desired time or at the lowest total cost. Physical distribution has now been expanded into the broader concept of supply chain management (SCM). Supply chain management starts

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MARKETING EXCELLENCE ZARA

Zara, the Spanish-based company, is Europe’s leading apparel retailer, providing consumers with current, high- fashion styles at reasonable prices. With more than $14.5 billion in sales and more than 2,000 stores, the company has succeeded by breaking virtually every traditional rule in the retailing industry. The first Zara store opened in 1975. By the

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MARKETING EXCELLENCE BEST BUY

Best Buy is the world’s largest multichannel consumer electronics retailer, with $45 billion in sales in fiscal 2013. Sales boomed in the 1980s as the company expanded nationally and made some risky business decisions, like putting its sales staff on salary instead of commission. This decision created a more consumer-friendly, low- pressure shopping atmosphere

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The Role of Marketing Communications

Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers— directly or indirectly—about the products and brands they sell. In a sense, they represent the voice of the com­pany and its brands; they are a means by which the firm can establish a dialogue and build relationships with consumers.

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Marketing Communications Mix

In this new communication environment, although advertising is often a central element of a marketing commu­nications program, it is usually not the only one—or even the most important one—for sales and building brand and customer equity. Mondelez International is partnering with nine digital start-ups to gain an advantage in that area, committing to spend

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How Do Marketing Communications Work?

Marketing communication activities in every medium contribute to brand equity and drive sales in many ways: by creating brand awareness, forging brand image in consumers’ memories, eliciting positive brand judgments or feelings, and strengthening consumer loyalty. The way brand associations are formed does not matter. Whether a consumer has a strong, favorable, and unique

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Developing Effective Communications

Figure 19.3 shows the eight steps in developing effective communications. We begin with the basics: identifying the target audience, setting the communication objectives, designing the communications, selecting the commu­nication channels, and establishing the total marketing communications budget. 1. IDENTIFY THE TARGET AUDIENCE The process must start with a clear target audience in mind: potential

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