“The customer has escaped”

Group No 2
Abhishek Kumar Jha (93002)
Amba Prasad Tiwari (93007)
Najmul Hoque (93032)
Ravindra Kumar (93039)
Siddharth Baghel (93053)
 Where do you buy from?
• Mobile Phones
• Laptops/PC
• Air Tickets
• Watch
• ULIP Plan
 Where do you search for information?

• Internet
• Company retails stores
• Large showrooms
• Malls
• Company’s Agent
 How customer buys?
Channel

Need Recognition Tax Saving/Investment

Search Internet / Customer Agent

Customer Agent/ Outside Agent/Online

Evaluate Option

Purchase Outside Agent (5% commission earned )

Post Purchase Customer Agent

Time and effort put in each step depends upon nature of product, perceived risk, and
nature of purchase.
 Problems Situation
• Stranded assets
– Highly Trained underused sales force
– Inventory dedicated to displays
• Channel Design Strategy (what to how)
• Segmentation v/s Consumer Behavior
• Distribution Problem (Sync among channels)
• Lack of generalization
• Cost – No of Channel Trade off
Building New Pathways
Understanding Consumer Behavior

• Behavior based Categories

― Habitual Buyer
― High level deal seekers
― Variety-loving shoppers
― High- involvement Shoppers
• Perception Modification
(avoid selective retention/selective exposure)
• Create Links between pathways
• Social Factors
– Opinion leaders
– Roles and Family Influences
– Reference Groups
 Channel Selection
• Captive Channel (Staples)
– Provide strong incentive
– Bind activities in buying process to force customer to
use designated pathway
• Open Channel (Toyota)
– Unbundling company’s offer
– Deliver through channel most economical for
customer
* Selection depends upon assets, skills, partners, investment
patterns, marketing risk taking capability.
 Assessing Capabilities
Criteria for designing market system for the company
i) Determination of variables for devising most
efficient channel
ii) Company’s inherent strength
 Aspects for Variable Selection
• Level of product and service integration
• Assortment Requirement
• Product availability
• Quality assurance of product
 Forms of Channel Strategy on the basis of
Company’s inherent strength
• Specialization in one phase of distribution
Open Channel: Competitive advantage through product or process
competence
• Coordination of information flow
Comp. advantage through customer relationship
Best suitable for undifferentiated competitors playing same channel roles
• Combining Several Channel roles
Captive channel: deliver a set of activities more valuable than its constituent
parts.
• Exploiting Customer Relationship
Focus on specialization in particular channel role
 Organizational Aspect
• A Shared understanding
• Cross Channel Performance
• New management information
• Targeted Education
Conclusion