Channel Strategy

Channel Strategy - Channel Strategy Push strategy induce...

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Channel Strategy Push strategy – induce intermediaries to carry products Pull strategy – use advertising/promotion to persuade customers to ask intermediaries to carry products Demand chain network – what solutions are customers looking for?
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What Channel Members can Do Gather information about current/potential customers, competitors, environment Develop persuasive communications Place orders with manufacturers Finance inventories Assume some risks Provide storage/transportation
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Channel Alternatives Types of intermediaries Merchants/wholesalers – buy/take title/resell Agents – do not take title/may negotiate for producer Facilitators – assist distribution but do not take title Number of intermediaries Exclusive – limited number Selective – greater number, but not saturation’ Intensive – as many outlets as possible Responsibilities/Terms Price policy – list prices/schedule of discounts and allowances Territorial rights – who gets credit for sale Mutual services/responsibilities – promotional support, record keeping, construction
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Channel Dynamics Vertical Marketing System – producer, wholesalers, retailers act as unified system Channel captain = owner Corporate – one owner Administered – based on member’s size/power Contractual – programs integrated on contractual basis Horizontal Marketing System – two or more unrelated firms pool resources (supermarkets and banks) Multichannel – two or more channels (e.g. Avon – direct sellers, Internet, catalogs)
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Seller 1 Buyer 1 Seller 2 Seller 3 Seller 4 Buyer 2 Buyer 2 Buyer 2 Channel Efficiencies
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Seller 1 Seller 2 Seller 3 Seller 4 Buyer 2 Buyer 2 Buyer 2 Buyer 1 Middleman Channel Efficiencies
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Matching Supply and demand 1. Sorting out . Breaking down a heterogeneous supply into separate stocks that are relatively
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Channel Strategy - Channel Strategy Push strategy induce...

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