CM (Fach) / Topic 4 Channel Structure (Lektion)
In dieser Lektion befinden sich 12 Karteikarten
Channel
Diese Lektion wurde von Spellex erstellt.
- What is "Intensive distribution" ? brand can be purchased at large number of outlets and formats. Extreme = Saturation
- What is "Selective distribution" ? brand can be purchased at few outlets and formats. Extreme = Exclusive distribution strategic choice, NOT the inability to attract channel members to carry the brand decision influenced by the nature of the product category, the marketing strategy of the brand and the size of the target market.
- How channel members see intensive distribution - They seek differentiation via assortment --> intensive distribution erodes this differentiation - Due to similar assortment, price competition increases --> called intrabrand competition - Problem of free-riding --> especially when different channels offer different levels of service outputs Overall : - Channel members dislike intensive distribution - Very significant source of conflict
- How do channel members attempt to restore or maintain equilibrium? Delisting brand (except for most powerful brands where there is a lot of "pull") List brand but no active support/sales effort "Bait and switch"
- How manufacturers can sustain intensive distribution Contractually (e.g. barring bait & switch) Invest in "pull" strategy Resale price maintenance (RPM) - manufacturer sets floor prices - prevents competition - consumer "pay" the price Frequent introduction of new product Branded variants - nationally branded products which assume non equivalent forms across retail outlets / channels (the same underlying physical product is subject to minor (cosmetic) changes) - often more expensive brand, name shopping goods such as vacuum cleaners, mattresses, watches - mitigates price competition for widely distributed shopping goods
- What is "Pull Strategy"? - In a "pull-system", the manufacturers convinces the end-user to demand a certain product in order to put pressure on the retailer/wholesaler, who then has to oblige to put the product in the assortment.
- "Bait and Switch" First, customers are "baited" by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available and are "switched" to a costlier product. The goal of the bait-and-switch is to persuade buyers to purchase the substitute goods as a means of avoiding disappointment over not getting the bait. It suggests that the seller will not show the original product or service advertised but instead will demonstrate a more expensive product or a similar product with a higher margin
- Factors that have an impact on equilibrium Nature of product class Quality of positioning of brand Brand's targeting strategy
- Nature of a product (class) 1. Convenience goods (more intensive distribution) Lower price Immediate purchase More frequent purchase Gain from making price and quality comparison is low Example : Fast moving consumer goods (soft drinks, toiletries, grocery items, etc) 2. Shopping Goods (more selective distribution) Higher price Infrequent purchase Gain from search might be considerable Example : Appliances, TV, Computer 3. Specialty goods (more selective distribution) Might be either convenience or shopping goods But have features that customers insist upon ( --> taste) Willing to make a special effort to search out product
- Challenges and Solutions of Quality of Positioning (of brand) Challenges : Finding right channel partners who appropiately support brand Enlisting channel support when intrabrand competition is low due to selective distribution(given that channel partner is right) Possible Solutions : put highly demanding contracts in place typically linked to exclusive territories drives self-selection of channel partners 2. create product scarcity and therefore pull!
- Brand Targeting Strategy The more a brand targets a customer niche (small segment) the more it will pursue selective distribution. Partially driven by "unattractiveness" to channel Niche buyers will "seek out" the brand
- Positioning choice on the equilibrium The positioning choice is driven by the joint ( manufacturer and channel member ) evaluation of the expected payoff: incremental sales/profits versus lost sales/profits Potential strategic costs and benefits of working with a given partner