Whats Important (interesting?

) from Part 6, Chapters 15 and 16

Delivering Value s
Managerial Marketing Fall 2010

Successful Value Delivery

Look up the supply chain
Suppliers Manufacturers

Firm

Look down the

distribution chain

Customers

Increased market segmentation can help rms reach more customers.

In Marketing-Speak, how goods and services get to the nal consumer or user is through a MARKETING CHANNEL Merchants - take title and resell goods Agents - act on rms behalf, dont take title Facilitators - airline tickets

Channel Strategies
Push Strategy: induce intemediaries to
carry and sell products.

Pull Strategy: use marketing and advertising

to induce consumer demand.

Channel Development
Some rms develop strategies
for local or regional markets

Some rms use the same

strategy everywhere, which can be successful but can also cause problems.

Walmart - success and failure

Hybrid Channels

Customer Needs
Habitual Shoppers - regulars High Value Deal Seekers - bargain hunters Variety Loving Shoppers - adventurers High Involvement Shoppers - high maintenance

Value Networks
-Look through the channels to nd ways to increase value. -Consider the end user / customer and work back from there. -Discover where prot margins are highest. -The interface with the customer is the face of your rm.

Channel Functions and Flows

Title, goods
Forward Flow

Suppliers, Manufacturers

Firm
Backward Flow

Customers

Orders, returns, end of life take backs

A Firm may require any number of channels

Manufacturing Firm

Sales Channel Delivery Channel Service Channel

One-Level Channel Manufacturers Retailer Customers

Consider also reverse ow channels Thats not my job.

Use USPS as one of their channels Use the internet as another User content informs

Channel Design Decisions

Lot size; Hertz purchasing vs. individual Waiting / delivery time Spatial convenience / proximity to goods Product variety found through channel Service backup; other services provided by channel

Objectives and Constraints

Intermediaries: Exclusive Distribution Selective Distribution Intensive Distribution

$0.01

Sales Agent vs. Company Sales Team Principal / Agent Questions

Economic Analysis of Channel Choices

The Channel is the Company Channel Power: Coercive Power Reward Power Legitimate Power Expert Power Referent Power

$4,032 / sf

Channel Evaluation
Vertical Marketing system: Firm seeks to have more control over interface with customer. Southwest Horizontal Marketing system: Firm seeks to saturate market with sometimes overlapping channels. Disney with their own retail outlets, plus video sales at Walmart, other retailers.

Pitfalls: Dilution and cannibalization Channel conict and competition

 Online customers choose a retail store.

Harley Davidson

Helps to align goals, and to allow channels to supplement each other.

E-commerce supplement Firms increasingly using the internet to

channels, or to have more control over customer interface. Seeking more direct interface, chats with online customers, targeted ads, etc. M-commerce

Managing, Retailing, Wholesaling, Logistics

Broad Categories of Retailing

Bloomingdales Tiffanys Sunglasses Hut Walmart

The Retail Environment

Challenges - differentiation and shelf space RFIDs and technology Decline of the middle market retailers Interesting niches, Trader Joes, Whole Foods Private Labels, Threat and Opportunity

Wholesaling and Logistics

Where do rms add value: wholesalers
and access to customer information, distribution, marketing channels; nancing and risk; transportation

Trend towards vertical integration Logistics and supply chain management Balance of conicting forces such as
time vs. cost

Delivering Value s
When is it enough? Are we just conduits for money to ow through? What is the price we pay for a constant barrage of marketing? Marketing, like Markets, is values-neutral, materially rewarding those who deliver value How can we not only deliver value, but also values?