Marketing Chapter 12 a.docx

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Management and Organizational Studies
Management and Organizational Studies 2320A/B
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Chapter 12Marketing Channels Delivering Customer ValueEnterprise RentACar1 NA rental car companythis happened bc of its customer driven distributions strategy While competitors HertzAvis focused on serving travellers at airports Enterprise opened offairport neighbourhood locations that provided ST car replacement rentals for ppl whose cars were wreckedstolenservicedSince customers in the city have no way to get to an Enterprise office to pick up a rental carcompany picks up customersbrings them back to the rental officecompanys main value propositionPick enterprise Well pick you up Supply Chainsthe Value Delivery NetworkSupply chain consists ofoUPSTREAMset of firms that supply raw material components parts info finances expertise needed to create a productservice oDOWNSTREAMmarketing channels distribution channels thatconnect the firmits customerswholesalersretailersFocus of marketerssupply chaintoo limited bc it takes a makesell viewdemand chain would be better bc it suggests a senserespond view where planning begins with the needs of target customersValue Delivery Network the network made up of the company suppliers distributors ad ultimately customers who partner with each other to improve the performance of the entire system in delivering customer value Chapter focusmarketing channels downstreamNatureImportance of Marketing Channels Few producers sell their goods directly to customersuse intermediariesMarketing Channel Distribution Channel set of interdependent orgs that help make a productservice available for useconsumption by the consumer or business user A companys channel decisions directly affect every other marketing decisionoEx whether a company developsacquires new products may depend on how well those products fit the capabilities of its channel members Companies often pay too little attention to their distribution channels but many have used them to gain a competitive advantage Distribution channel decisions often involve LT commitments to other firmsoEx if Ford set up distribution channel contracts with franchisesindependent dealers they cant easily replace these channels How Channel Members Add Value Producers use intermediaries bc they create greater efficiency in making goods available to target marketsoffer the firm more than they can achieve on their owncontacts experience specialization scale of operationEconomic system POVintermediaries transform the assortment of products made by producers into the assortment wanted by consumersMarketing channel members buy large quantities from producersbreak them down into smaller quantitiesbroader assortments wanted by consumersoIntermediaries match supplydemand Members of the marketing channel perform many key functionsoInformationgatheringdistributing marketing researchintelligence info about actorsforces in the marketing enviro needed for planningaiding exchange oPromotiondevelopingspreading persuasive communication about an offeroContactfindingscommunicating with prospective buyers oMatchingshapingfitting the offer to the buyers needs including activities such as manufacturing grading assembling packaging oNegotiationreaching an agreement on priceother terms of the offer so that ownershippossession can e transferred Others help to fulfill the completed transactionsoPhysical Distributiontransportingstoring goodsoFinancingacquiringusing funds to cover the costs of the channel workoRisk Takingassuming the risks of carrying out the channel work Environmental Sustainabilitynew item added to the list of functions to be performed within the supply chain When some of these functions are shifted to intermediaries the producers costsprices may be lower but the intermediaries must charge more to cover the costs of their workVarious functions should be assigned to the channel members who can add the most value for the costNumber of Channel Levels Channel Level layers of intermediaries that perform some work in bringing the productits ownership closer to the final buyer oProducerfinal consumer are a part of every channeloDIAGRAM PG 393consumerbusiness channelsNumber of intermediary levelsthe length of a channelDirect Marketing Channel a marketing channel that has no intermediary levelsoCompany sells directly to the consumer
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