Chp 10 Distribution Channel

Front 1

Distribution?

Back 1

Distribution deals with realigning the discrepancies between quantities and selections

Breaking bulk整批拆售: making goods available in smaller batches

Front 2

Distribution channel

Back 2

is the path that goods take as their title transfers from producer to consumer

Front 3

Actors in distribution channels

Back 3

- Manufacturing firms
- Distributors or wholesalers
- Retailers
- Consumers

Front 4

Activities in Distribution Channels: Customer oriented

Back 4

-Ordering, Handling, Shipping, etc

Front 5

Activities in Distribution Channels: Product-oriented

Back 5

Storage & display, etc

Front 6

Activities in Distribution Channels: Marketing-centric

Back 6

Promotion, etc

Front 7

Activities in Distribution Channels: other?

Back 7

Financial-oriented & Logistics

Front 8

Tension in Distribution Channels

Back 8

Tension in channels can be created by the contribution of each channel member

Front 9

Designing Distribution Channels

Back 9

- What is the type of good?
- What do customers want?
- Determine distribution intensity (How many intermediaries中介机构 will be used?)
- Determine push or pull strategy
- Determine how to deal with conflict

Front 10

Type of good?

Back 10

-Convenience
- Shopping
- Specialty

Front 11

Distribution strategy?

Back 11

-Intensive
-Selective
-Exclusive

Front 12

Intensive Distribution?

Back 12

- Convenience
- Widely distributed
- Drugstores, supermarkets, discount stores, convenience stores
- Usually for simple, inexpensive, easily transported products
- Pull strategy: promote directly to end consumers to pull through channel

Front 13

Selective Distribution

Back 13

- Shopping
- Less widely distributed
- Usually for complex and/or expensive products that require assistance (Cars, computers, appliances)
-Push strategy: promote to distribution partners to push goods to consumer
-Manufacturer has more control due to fewer relationships to manage

Front 14

Exclusive Distribution

Back 14

- Specialty
- Manufacturers have the most control
- May become monopolistic

Front 15

Intensity Strategies

Back 15

Intensive distribution usually goes with heavy promotion, lower prices and average or lower quality products

-Exclusive distribution usually goes with exclusive promotional efforts, higher prices and higher quality products

Front 16

Distribution Channel Strategy

Back 16

- Novelty
- Variety
- Density
- Directness

Front 17

Pull Strategy

Back 17

Incentives offered to consumers to pull products through the channel
- Advertise to consumers
- Distributed widely
- Offer price and/or quantity discounts
- Offer inexpensive trials or free samples

Front 18

Push Strategy

Back 18

Incentive offered to distribution partners to push products through the channel
- Advertise to partners (and consumers)
- Distribute more selectively
- Employ a sales force
- Offer incentives to sales force
- Offer price and/or quantity discounts
- Offer financing
- Offer allowances for marketing activities

Front 19

Channel Conflict

Back 19

- Conflict can arise when channel partners differ in their opinions on how to please customers and maximize profit
- Conflict may motivate parties to find alternative solutions

Front 20

Types of Power: Coercive Power

Back 20

-强制的；胁迫的；高压的
- Ability to take away benefit or inflict punishment on other party

Front 21

Types of Power: Information power

Back 21

- Having information other party seeks

Front 22

Types of Power: Legitimate power

Back 22

- Using size or expertise to encourage other party

Front 23

Types of Power: Referent power

Back 23

One party seeks an affiliation with other

Front 24

Types of Power: Reward power

Back 24

- Ability to provide good outcomes for other party

Front 25

Dealing with Conflict

Back 25

- Develop effective communication to enhace trust and satisfaction
- Make sure that parties feel that they're being heard and their needs are understood and being met
- Remind channel members of mutual goal of customer satisfaction

Front 26

Building Channel Relationship: Mediation

Back 26

Negotiate through a their party that determines the two parties' utility functions

Front 27

Building Channel Relationship: Arbitration

Back 27

The third party makes a binding decision for the two

Front 28

TCA

Back 28

Transaction Cost Analysis
- A model that considers channel members' production costs and governance costs, both of which are ideally minized

Front 29

Two cost of TCA

Back 29

1. Production Cost
- Costs of producing/bringing product to market

2. Governance Costs
- Costs involved with relational issues incurred coordinating the enterprise and controlling one's partners

Front 30

Channel Integration

Back 30

- If a company is currently using a partner to do something, it might wish to bring that function back in-house

Front 31

Channel Integration: Forward integration

Back 31

Manufacturer controls its retail stores

Front 32

Channel Integration: Backward integration

Back 32

Manufacturer controls raw material

Front 33

Private Labels Advatages

Back 33

-May give retailer negotiating power with the manufacturer
-May offer significant margin opportunities
-May allow retailer to distinguish itself as the only place that offers that brand

Front 34

Types of Retailing
-Categorize retailer according to extent of manager's ownership

Back 34

-Independent retailers
-Branded store chains
-Franchises特权

Front 35

Types of Retailing
- Categorize retailers according to their level of service which tends to be positively related to their price point

Back 35

- Full service
- Limited Service

Front 36

Types of Retailing
- Categorize retailers according to product assortment

Back 36

-Specialty: carry depth not much breadth
-General merchandise: carry breadth but not much depth

Front 37

Important of Retail Employee

Back 37

- Retailer benefit from selecting good people, training them, paying them, rewarding them well, and empowering them

Front 38

Important of Operations

Back 38

- Flowcharting operations
* Front- stage: elements customers see
* Back-stage: elements customers do not see

Front 39

Importance of Location

Back 39

- environmental data: population densities, income and social class distribution, median ages, household composition

Front 40

Retailer Growth Strategies

Back 40

- Provide additional services
- Reach out to attract additional segment
- Open additional stores
- Expand internationally

Front 41

Franchising

Back 41

Company can retain some control without complete ownership or capital expenditure
- Franchisor: the company
- Franchisee: the local owner (Pays fee and royalties)

Product franchising: Ford dealer, Coco-cola bottlers

Business format franchising: McDonald's, Holiday Inn

Front 42

E-commerce & Catalog Sales

Back 42

they are complementary
- Catalogs are preferred for browsing, trigger Web visits
-Customer databases are utilized for customized catalogs, promotions

Front 43

Sales Force

Back 43

Utilized extensively by companies utilizing a push strategy
- For more undifferentiated products, a company's sales force is its most important driver of its performance

Front 44

Sales Force Compensation

Back 44

Sales Compensation is usually salary plus bonueses

Front 45

Sales Performance

Back 45

Evaluation factors:
- Sales
- Time spent with clients
- Expertise
- Knowledge
- Attitudes
- Days worked
- Selling expenses