Welcome to Marketing Channels

1
Welcome to Marketing Channels
2
Jared Young

• Room T418
• Ext 1288
• Consultation Times
• Monday 10am to 12pm
• Tuesday 1pm to 3pm
• Wednesday 10am to 12 pm
• Additional time by appointment only
• Friday 11 to 12

3
Tutorials

• Tutorial times
• Monday 1pm to 3pm room TA 220
• Tuesday 10am to 12pm room T118
• Please Note
• Tutes are compulsory as part of your grade can
  only be attained by tute attendance and
  participation
• Some tutes may only go for one hour
• 2nd hour left for directed group study

4
Learning Resources

• Textbook Rosenbloom 1999
• Introductory book
• Study guide
• Book of readings
• Lecture outline on the network
• Course homepage (ancillary material)
• http//www.usq.edu.au/course/material/MKT2004

5
Introductory book

• Unit overview (p. 5)
• Approach to study (p. 6)
• Notes on case analysis (pp. 6-9)
• Study schedule (p. 11)
• Assessment (pp. 12-7)
• different for internals (handout in tutorial)
• Faculty policy on plagiarism, collusion and
  cheating, and appeals (p. 18)
• Extension policy (p. 17)
• Past examination paper (p. 21)
• markers notes

6
Assignments internal students

• Assignment 1
• group case study presentation and case brief
  (20)
• Individual case questions and class participation
  (10)
• Assignment 2
• written report (30)

7
Examination

• Overview of exam (p. 12)
• 2 hours
• 12 short answers - 1/2 to 2/3 page
• based on module objectives and review questions
• one reading will be examined
• all modules
• past examination paper (p. 21)
• based on previous text
• markers notes
• BE CAREFUL!!!

8
Study guide includes.

• Objectives for the module
• Key terms
• Readings
• Important points from text and readings
• Self assessment exercises
• review questions
• chapter questions
• tutorial activity
• feedback on chapter questions

9
Resources for Marketing Channels

• Textbooks
• Rosenbloom 658.84Ros
• Berman 658.84Ber
• Stern 658.84Ste
• Journals
• Journal of Marketing Channels 658.84P1
• Journal of Marketing Logistics 658.8P7
• Retail World 381.10994P1

10
How to succeed

• Work progressively through the semester
• Ave. day student to get ave. result (60) will
  spend an ave. of one hour per percent allocated
  for assessments PLUS an extra hour per week doing
  review activities
• Proper Prior Preparation Prevents Poor
  Performance
• READ BEFORE THE LECTURE!!!!
• Lectures will be interactive, discussion based
• Assist understanding through application
• Make sure you learn and understand the concepts
  in this first lecture
• Ask for help
• USE THE DISCUSSION GROUP

11
Marketing channels An introduction

• Module 1 chapter 1

12
Lecture Overview

• The placement element
• What is a marketing channel?
• Channel management
• Marketing channel flows
• Why use intermediaries?
• Alternative channel structures
• The importance of marketing channels
• Main objective is to get a clear understanding of
  each of these concepts and relate to real life.

13
The placement element

• part of the marketing mix
• distribution
• the way in which products are distributed from
  producer to end-user
• can be a major source of competitive advantage
• provides place and time utility
• makes products accessible to customers in a
  convenient and timely manner

14
What is a marketing channel?

• the external contactual organisation that
  management operates to achieve its distribution
  objectives (Rosenbloom 1999, p. 9).

15
The marketing channel involves

• independent firms yet interdependent
• manufacturers, wholesalers, retailers
• inter-organisational management
• integration and coordination of activities
• cooperation and communication
• shared goals

16
The marketing channel includes..

• Channel members
• those participants who perform the negotiatory
  functions of buying, selling and transferring
  title (p. 26)
• Ancillary structure
• the group of institutions (facilitating agencies)
  that assists channel members in performing
  distribution tasks (p. 26)
• transportation, storage, insurance, financing,
  advertising, market research etc.

17
Channel management is...

• the process of planning, managing and controlling
  channel activities.

18
Channel strategy is.

• the entire process of setting up and operating
  the contactual organisation that is responsible
  for meeting the firms distribution objectives
  (p. 15)
• Logistics management is
• providing product availability at the
  appropriate times and places in the marketing
  channel (p. 15)

19
Marketing channel flows?

• Refer to figure 1-4 (p. 17)
• One-way and two-way flows
• Product
• physical movement from producer to end user
• Negotiation
• matching buyers and sellers, terms etc.
• Ownership
• transfer of title
• Information
• Promotion

20
Distribution tasks include

• Buying and selling
• Transferring title
• Transportation
• Storage
• Order processing
• Providing information

21
Why use intermediaries?

• specialisation and the division of labour
• leads to more efficient and effective
  distribution
• economies of scale
• contactual efficiency
• reduce number of contacts
• reduce market transaction costs

22
Contactual efficiency(refer to figure 1.6, p. 22)
M
M
M
M
M
M
M
M
W
R
R
R
R
R
R
R
R
16 contacts
8 contacts
23

• overcome the discrepancy of quantity and
  assortment
• manufacturers product large quantities of a
  limited assortment of goods
• consumers want small quantities of a broad
  assortment of goods

24
Major channel functions

• Sorting
• accumulate
• sort
• re-allocate
• Breaking bulk
• break large lots into small lots

25
Channel functions can be shifted but they cannot
be eliminated.
26
What is channel structure?

• The group of channel members to which a set of
  distribution tasks have been allocated
  (Rosenbloom 1999, p. 24).
• Based on channel specialisation
• efficient and effective task allocation
• Refer to fig 1-7, p. 23
• Number of levels of intermediaries
• Channel length short to long
• Direct or indirect

27
Channel structures
2 level
3 level
5 level
4 level
Manufacturer
Manufacturer
Manufacturer
Manufacturer
Agent
Wholesaler
Retailer
Wholesaler
Retailer
Retailer
Consumer
Consumer
Consumer
Consumer
28
Why are marketing channels increasing in
importance?

• Role in gaining a sustainable competitive
  advantage
• an established channel strategy is difficult to
  copy in the short-term
• long-term, structure based on relationships
• Growing power of distributors
• retailers and wholesalers
• need to improve relationships between members

29

• Need to reduce the costs of distribution to be
  competitive
• Avenue for growth
• Access new markets
• Penetrate current markets
• Impact of technology
• Internet, automation, EDI etc

30
Summary/Review

• How does Channels fit into the marketing mix?
• What is a marketing channel? What is and what is
  not a channel member?
• Channel management
• List the flows in a Marketing channel
• Why use intermediaries?
• List 4 alternative channel structures
• Name 5 factors leading to the growing importance
  of marketing channels

31
Tutorial Program

• Discuss assessment for internal students
• Discuss case analysis guidelines (introductory
  book pages 6-9)
• Apply to case Snap on Tools
• Organise case teams
• Study guide
• Activity 1.1, part 1
• Activity 1.5, part 1