PowerPoint Slides to Accompany Marketing Channels, 7th Edition

,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,PowerPoint Slides to Accompany,Marketing Channels,7,th,Edition,Anne T. Coughlan, Northwestern University,Erin Anderson, INSEAD,Louis W. Stern, Northwestern University,Adel I. El-Ansary, University of North Florida,Chapter 4,Supply-Side Channel Analysis: Channel Structure and IntensityLearning Objectives,FIGURE 4- 1: SAMPLE REPRESENTATIONS OF THE COVERAGE/MARKET SHARE RELATIONSHIP FOR FAST MOVING CONSUMER GOODS,Based on Reibstein, David J., and Paul W. Farris (1995), Market Share and Distribution: A Generalization, A Speculation, and Some Implications,Marketing Science, 14,(3), G190-G202.,FIGURE 4- 2: : SELECTIVE COVERAGE-THE MANUFACTURERS CONSIDERATIONS,FIGURE 4- 3: CATEGORY SELECTIVITY: THE DOWNSTREAM CHANNEL MEMBERS CONSIDERATIONS,Chapter 5Gap Analysis,FIGURE 5-1: THE GAP ANALYSIS FRAMEWORK,SOURCES OF GAPS,Environmental Bounds:,Local legal constraints,Local physical, retailing infrastructure,Managerial Bounds:,Constraint due to lack of knowledge,Constraint due to optimization at a higher level,TYPES OF GAPS,Demand-Side Gaps:,SOS SOD,Which service outputs?,Supply-Side Gaps:,Flow cost is too high,Which flow(s)?,CLOSING GAPS,Demand-Side Gaps:,Offer tiered service levels,Expand/contract provision of service outputs,Change segment(s) targeted,Supply-Side Gaps:,Change flow responsibilities of current channel members,Invest in new low-cost distribution technologies,Bring in new channel members,FIGURE 5-2: ONLINE BILLING AND PAYMENT: GAP ANALYSIS,BOUNDS,GAPS,CLOSING THE GAPS,Environmental:,Technology infrastructure:,takes time to fully develop,initially endowed benefits more on,billers,than on,payers,is not universally available,is characterized by high fixed set-up costs, but low marginal implementation costs and thus is not attractive unless significant scale is achieved,Demand-side:,Assortment/variety (one-stop bill payment site not available),Waiting time too long (some e-bills took 5 days to pay),Information provision poor (thus e-bill payment viewed as risky),Supply-side:,Clear lowering of many channel flow costs,But consumer (as a channel member) bears more,perceived,risk, with no compensating price cut,Cost cuts initially much more available to,biller,than to,payer,(asymmetric cost efficiencies that hamper adoption),Relax environmental bounds:,Build software applications to generate back-office benefits for B2B players,Presentment technology eventually developed to improve assortment/variety for consumer payers,Increase promotional efforts,generate information for consumers,Add new specialist channel members,New specialists develop new technology to provide integrated benefits to consumers and B2B payers,FIGURE 5-3: ONLINE BILLING AND PAYMENT: A VIRTUOUS CYCLE,Note: the B2B process exhibits a similar path, with the added inducement to payers of the development of technologies to integrate bill payment information with back-office (accounts payable, inventory management, and ordering) processes.,FIGURE 5-4: APPLYING THE GAP ANALYSIS FRAMEWORK TO REVERSE LOGISTICS,Sources of Gaps:,Environmental Bounds:,Managerial Bounds:,Infrastructure for managing returns is not as well developed as for forward logistics.,Many manufacturers lack information about scope of problem and how much money they are losing by not managing it better.,Types of Gaps:,Demand-Side Gaps:,Supply-Side Gaps:,Customer service,: end-users may be dissatisfied when charged a restocking fee, as many are not widely publicized.,Quick delivery,: end-users fail to get their desired product quickly when they have to return it for exchange or refund.,Physical possession, ownership, and financing,: returned product held in the system for 30-70 days before returning to the market for resale adds to all of these costs.,Promotion,: when returned product is sent to a liquidator, it is likely to end up in a channel competitive to the new-goods market, creating brand confusion and promotional inefficiency.,Risking,: uncertainty on both the supply (demand forecasting) and demand (what product is right for me?) sides,Payment,: returns trigger multiple new payment flows, to end-user (who returns product), to retailer (who gets money back from original invoice paid to manufacturer), and to third-party disposal or logistics firms.,Closing Gaps:,Demand-Side Gaps:,Supply-Side Gaps:,Efforts to minimize returns improve on quick delivery.,Effective third-party logistics specialists not only handle returned product faster, but also repackage and re-kit it to sell through non-competing new channels.,FIGURE 5-5: PATH FOLLOWED BY A COPY OF“THE PERRICONE PROMISE”,1,4,2,7,3,6,5,KEY:,1,4: Lebanon, Indiana,2,7: Marina del Rey, California,3,6: Jamesburg, New Jersey,5: Bridgewater, Massachusetts,TOTAL DISTANCE: 9,600 MILES,TABLE 5-1: U.S. RETAIL MUSIC SALES, 1999-2003,Year,Sales in $billion,1999,$14.6,2000,$14.3,2001,$13.7,2002,$12.8,2003,$11.8,TABLE 5-2: AVERAGE RETAIL CD PRICES IN THE U.S.,Time Period,Average Price,2002 (Q1),$13.90,2002 (Q2),$13.90,2002 (Q3),$13.60,2002 (Q4),$13.90,2003 (Q1),$13.80,2003 (Q2),$13.70,2003 (Q3),$13.50,2003 (Q4),$13.55,2004 (Q1),$13.25,TABLE 5-3: SHARE OF ALBUMS SOLD BY CHANNEL, 2002,Channel,Share of Albums Sold,Music chain stores,51.0%,Mass merchants,33.8%,Independents,11.9%,Other,3.3%,Notes: 680.9 million albums were sold in total in 2002. Mass merchant channel includes Best Buy, Kmart, Wal-Mart, Costco, and Target.,FIGURE 5-6: TYPES OF GAPS,FIGURE 5-7: CHANNEL COSTS AND THE PRINCIPLE OF POSTPONEMENT-SPECULATION,Source: Adapted from Louis P. Bucklin,A Theory of Distribution Channel Structure,(Berkeley, CA: IBER Publications, University of California, 1966), pp. 22-25.,FIGURE 5-8: DEMAND-SIDE GAP ANALYSIS TEMPLATE,SERVICE OUTPUT LEVEL DEMANDED (SOD) VERSUS SERVICE OUTPUT LEVEL SUPPLIED (SOS),SEGMENT NAME/ DESCRIPTOR,BULK BREAKING,SPATIAL CONVENIENCE,DELIVERY/ WAITING TIME,ASSORTMENT/ VARIETY,CUSTOMER SERVICE,INFORMATION PROVISION,MAJOR CHANNEL FOR THIS SEGMENT,1.,2.,3.,4.,5.,Notes and directions for using this template:,Enter names and/or descriptions for each segment.,Enter whether SOSSOD, SOSSOD),Post-sale service: H (SOS=SOD),M (SOSSOD),H (SOS=SOD),H (both pre-sale and post-sale),(SOS=SOD),Value-added reseller like CDW, or retailer,2. Large business buyer,L (SOSSOD),Original equipment: H (SOS=SOD),Post-sale service: L (SOSSOD),Original equipment: M (SOSSOD),Post-sale service: L (SOSSOD),M/H (SOS=SOD),M (SOSSOD),L (SOSSOD),Manufacturer direct, or large reseller like CDW,3. Govt/ education,L (SOSSOD),Original equipment: H,(SOS=SOD),Post-sale service: H (SOS=SOD),Original equipment: M (SOSSOD),Post-sale service: M (SOSSOD),M/H,(SOS=SOD),H (SOS=SOD),H (both pre-sale and post-sale),(SOS=SOD),Manufacturer direct, or reseller; 23 percent from small business (VARs),FIGURE 5-11: SUPPLY-SIDE GAP ANALYSIS TEMPLATE: CDW EXAMPLE(to be used in conjunction with Demand-Side Gap Analysis Template,Figure 5-10),CHANNEL,targeting which segment(s)?,CHANNEL MEMBERS AND FLOWS THEY PERFORM*,ENVIRONMENTAL (E) / MANAGERIAL (M) BOUNDS,SUPPLY-SIDE GAPS,affecting which flow(s)?,PLANNED TECHNIQUES FOR CLOSING GAPS,DO/DID ACTIONS CREATE OTHER GAPS?,1. CDW direct to buyer (,small business buyer),Manufacturer;,CDW;,Sm. Bus. Buyer,(M): no screening of recruits for expected longevity with firm,Promotion sales force training/turnover,Better screening of new recruits,No,Buying from CDW,closes,gaps for customer in,Risking,2. CDW direct to buyer (,large business buyer, government),Manufacturer;,CDW, CDW-G;,Lg. Bus. Buyer or Government Buyer,(E): government requires 23 percent of purchases from small vendors,(M): no screening of recruits for expected longevity with firm,Promotion,sales force training/turnover,Negotiation,cannot close 23% of deals with government,Better screening of new recruits;,Rely on consortium channel structure (below),No,3. CDW + small business VAR consortium member (,government),Manufacturer;,CDW-G;,Small VAR;,consortium partner,Government Buyer,(E): government requires 23 percent of purchases from small vendors;,(M): VARs small business size,(M): no screening of recruits for expected longevity with firm,Promotion,sales force training/turnover;,(,Negotiation:,only a gap for a small VAR not in the CDW alliance),Better screening of new recruits;,Negotiation,gap above is closed through consortium with small VARs,No,Note: all channel members perform all flows to some extent. Key channel flows of interest are,promotion,negotiation, and,risking,.,Chapter 6Channel Power: Getting It, Using It, Keeping ItLearning Objectives,FIGURE 6-1 THE NATURE AND SOURCES OF CHANNEL POWER,As Level of Investment In,:,Reward,Coercion,Legitimacy,Expertise,Reference,UTILITY DERIVED,UTILITY DERIVED,BY B FROM A,BY B FROM A,SCARCITY OF Bs,SCARCITY OF Bs,ALTERNATIVES TO,ALTERNATIVES TO,A,As Offering to B:,Reward,Coercive,Legitimacy,Expertise,Referent,Competitive Levels Of:,Reward,Coercion,Legitimacy,Expertise,Reference,Dependence,of B on A,Power of,A over B,Bs access to,As competitors,FIGURE 6-2 USING POWER TO EXERT INFLUENCE,