SkeletonSlide23_2010Fall_MGMT324

Different clientele staff members in the supermarket

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different clientele, staff members in the supermarket locations are more sales oriented and younger than staff in the traditional brick-and-mortar branches Two or more unrelated companies put together resources or programs to exploit an emerging market opportunity Each company lacks the capital, know-how, production, or marketing resources to venture alone Example: In-store banking
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Channel Design Vertical Marketing System (VMS) Corporate VMS (Vertical Integration) Contractual VMS Common ownership Ex) Sears, Zara Franchise system: auto-dealer, fast food, hotels, etc. 2,000 franchised US companies over 320,000 outlets account for some $1 trillion in annual sales and one-half of all retail sales (2000) Administered VMS Command cooperation through the power of one or a few dominant channel members Ex) P&G, GE, Kraft etc.
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Channel Design Example: Vertical Integration A vertically integrated apparel retailer Unlike similar apparel retailers, Zara controls most of the steps on the supply-chain: It designs, produces, and distributes itself Considerably more products, quick lead time, & short product life cycle 11,000 distinct items annually compared with 2,000~4,000 items for key competitors Design strategy According to an article in Business world magazine, "Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used.” 4 or 5 weeks for a new product and only 2 weeks for a modification of existing products Items sold not well in the first week of introduction are withdrawn
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