This summary covers the course: Marketing Channel Management (-M-6) summary, at Tilburg University. In the summary the webclips, tutorials, and last Q&A session.
How to go to the market:
1) Indirect Channel: including a middlemen
Independent/third parties (retailer)
o Buy & own products
o Hold inventory
o Set consumer price
Physical or digital
2) Direct Channel: cutting out the middleman
Manufacturers straight to consumers and cutting out the middleman
Company-owned
o Manuf. holds inventory
o Manuf. sets consumer price
B&M or web store
Why go direct?
- Higher (gross) profit margin (even at lower consumer price)
COGS = Cost of goods sold
Why do not all manu’s go direct?
1) Middlemen add value > impact on sales
o Bulk breaking; allow buying in small lots
o Time convenience; reduce waiting time
o Assortment convenience; offer a wide variety of goods
2) Distribution costs: number of contact lines > impact on costs
o Non-routine transaction: manu to consumer
o Routine transaction: retailer to consumer
MARKET PLACES
Third party marketplace (3P Market)
- Indirect Channel
- Do not buy/own products
- Do not hold inventory
- Do not set price
= 3P Markets facilitate transactions and bring together manu’s and consumers
Profit generation: Retailer VS Market place
,How much is left for a manu that sells through a marketplace?
Consumer price – step in cost – commission = left for manu
Benefits of selling on a marketplace for manu’s:
1) Huge consumer traffic
o Long-tail products
o Cross-border selling
2) Quick launch
o Low set-up costs
o No Digital worries
Pitfalls for selling on a marketplace for manu’s:
- Marketplace learns from its selling’s
- Private labels will compete with the manu’s assortment
Pitfalls for retailers who expand in to becoming a marketplace:
1) No control over prices
2) No control over fulfilment
o Inconsistent delivery times, fee, and returning policies
3) No control over product presentation
o Inconsistent and misleading information about the product
= it can damage the retailer’s equity
MULTICHANNEL: THE MANUFACTURER’S PERSPECTIVE
Multiple channels compete with each other
Avoid under-distribution:
Les convenient for consumer to find your products
o Lower (volume) sales
Retailers may exploit their monopoly position. They will:
o Set higher prices
o Lower selling support
Effect of more channels:
- Price: manu’s have different prices that the middlemen > compete on the different
channels
Intra-brand competition on price
- Support: extra channels make it hard for the middlemen to earn money on it
Lower selling support
Avoid under-distribution:
, - More convenient for consumers to find your product
o Higher (volume) sales
- Fierce intra-brand price competition
o Resellers set lower prices
o Resellers lower selling support
Manufacturer’s objectives:
- Maximize market coverage
- Minimize channel conflict
o Minimize price competition
o Maximize selling support
How to minimize channel conflict while maximizing coverage?
- Exclusives (in some channels you offer exclusives only for them to sell)
- Different bundles (different bundles for different middlemen)
- Different product variants (different variants; package size)
GREY MARKETS
Products that are sold by unauthorized retailers (it is not illegal; real products are sold)
Grey markets: origin
- Dispose of overstock
o Unintentional (poor forecasting)
o Intentional (exploit quantity discounts through large scale buying)
How to go against unauthorized retailers (grey markets)?
- Cut out retailers that sell to grey markets
- Prevent the problem:
o Share data and analytics to forecast demand
o Buy back unsold inventory
- Join them if you cannot beat them (Amazon and Burberry, but it’s hard to keep out
grey market sellers)
OMNICHANNEL: THE RETAILER’S PERSPECTIVE
Omnichannel = every possible combination is possible
1) Information delivery: online + offline
2) Product delivery: pick-up + home delivery
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper ninaderuig1. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €4,49. Je zit daarna nergens aan vast.
