SkeletonSlide23_2010Fall_MGMT324

Direct channels indirect channels selling through

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Direct channels Indirect channels Selling through personal contacts from the company to prospective customers by mail, phone, electronic means, in-person visits and so forth Selling through third-party intermediaries such as agents or broker representatives, wholesalers or distributors, and retailers or dealers Direct channels Indirect channels Product information needs are high Product customization is high Product quality assurance is important Logistics are important A broad assortment is essential Availability is critical After service is important
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Channel Design Example: Direct vs. Indirect In the 1950s, pioneered The plastic food storage container business The means by which the containers were sold After experiencing 15-year-long decline in sales due to heightened competition from brands such as Rubbermaid increased proportion of working mom In 2002, Tupperware placed its products in all 1,148 Target stores
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Channel Design Example: Multi-Channel Strategy uses the wide variety of direct and indirect channels to sell its shoes, apparel, and equipment products Third-party retailers Nike products are sold in retail locations such as shoe stores, sporting goods stores, department stores, and clothing stores Nike Town stores Located in prime shopping avenues in metropolitan centers Offer a complete range of Nike products and serve as showcases for the latest fashions Outlet stores Specialty stores Nike equipment from product lines such as Nike Golf and Nike Hockey is often sold through specialty stores Catalog retailers Niketown.com Nike’s e-commerce site allows consumers place Internet orders for a range of products
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Channel Design Horizontal Marketing System (HMS) Horizontal vs. Vertical has over 500 in-store branches in supermarkets, which make up roughly 30% of its total branch network. To reflect
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