PowerPoint Slides to Accompany Marketing Channels 7th Edition

1
PowerPoint Slides to AccompanyMarketing
Channels7th Edition

• Anne T. Coughlan, Northwestern University
• Erin Anderson, INSEAD
• Louis W. Stern, Northwestern University
• Adel I. El-Ansary, University of North Florida

2
Chapter 1Marketing Channels Structure and
Functions
3
 FIGURE 1-1 CONTACT COSTS TO REACH THE MARKET
WITH AND WITHOUT INTERMEDIARIES
4
FIGURE 1.2 MARKETING FLOWS
IN CHANNELS           Physical Physical
Physical Possession Possession Possession
Ownership Ownership Ownership   Promotion Pro
motion Promotion   Negotiation Negotiation Ne
gotiation Consumers Producers Wholesalers Retai
lers Industrial Financing Financing Financing
and Household Risking Risking Risking
  Ordering Ordering Ordering   Payment Paym
ent Payment     Commercial
Channel Subsystem
 
5
     FIGURE 1-3 FRAMEWORK FOR CHANNEL DESIGN AND
IMPLEMENTATION  
Channel Design Process SEGMENTATION
Recognize and respond to target customers
service output demands Decisions About Efficient
Channel Response CHANNEL STRUCTURE What kinds
of intermediaries are in my channel? Who are
they? How many of them? SPLITTING THE
WORKLOAD With what responsibilities? DEGREE
OF COMMITMENT Distribution alliance?
Vertical integration/ownership? GAP ANALYSIS
What do I have to change?
Channel Implementation Process
CHANNEL CONFLICT Identify actual and potential
sources
CHANNEL POWER Identify sources for all channel
members
MANAGE/DEFUSE CONFLICT Use power sources
strategically, subject to legal constraints
GOAL Channel Coordination
INSIGHTS FOR SPECIFIC CHANNEL INSTITUTIONS Retail
ing, Wholesaling and Logistics, Franchising
6
TABLE 1-1 SERVICE OUTPUT DEMAND DIFFERENCES (an
example of segmentation in the book-buying market)
7
FIGURE 1-4 ORGANIZATION OF THE TEXT
8
Chapter 2Segmentation for Marketing Channel
Design Service Outputs
9
TABLE 2-1 ESTIMATED NUMBER OF U.S. CONSUMERS
USING ONLINE BILL PAYMENT, VARIOUS YEARS
Notes 1998 in 1998, just 2 of U.S. households
used online bill payment, according to Tower
Group (Bielski 2003). From U.S. Census data, in
1998, there were 100 million households in the
U.S., with an average of 1.7 adults per
household thus, 2 million households or 3.4
million adults were using online bill payment in
1998. 2001 A Forrester Research report said
that nearly 17 million U.S. households will pay
bills online in 2002, up 41 percent from 2001
numbers (Higgins 2002). Thus, in 2001, 12
million U.S. households paid bills online. From
U.S. Census data, there were 108 million
households in the U.S., with an average of 2.58
adults per household thus, there were 20.4
million adults using online bill payment in
2001. 2002 The same Forrester Research report
said that nearly 17 million U.S. households will
pay bills online in 2002 (Higgins 2002), while a
Tower Group report said that 13.7 of U.S.
households did pay bills online in 2002 (Bielski
2003). The table therefore reports the numbers
from Bielski. There were 109 million households
in the U.S. in 2002 thus, 15 million households
paid bills online. Further, there were an
average of 2.58 adults per household in the U.S.
in 2002 (from U.S. Census data), yielding the
estimate of 25.5 million adult online bill payers
in 2002. 2003 and 2004 A Gartner study cites 65
million U.S. consumers paying at least some bills
online, and reports this is almost twice as many
as in 2003 (Park, Elgin et al. 2004). We
therefore estimate that 35 million U.S. consumers
paid bills online in 2003.
10
TABLE 2-2 ONLINE BILL PAYMENT THE CONSUMER
EXPERIENCE

11
TABLE 2-3 BUSINESS-TO-BUSINESS CHANNEL SEGMENTS
FOR A NEW HIGH-TECHNOLOGY PRODUCT
Respondents allocated 100 points among the
following supplier-provided service outputs
according to their importance to their company

Additional Important Attributes
Greatest Discriminating Attributes
Source Reprinted with permission of Rick Wilson,
Chicago Strategy Associates, ?2000.
12
FIGURE 2-1 IDEAL CHANNEL SYSTEM FOR
BUSINESS-TO-BUSINESS SEGMENTS BUYING A NEW
HIGH-TECHNOLOGY PRODUCT
Manufacturer (New High Technology Product)
Associations, Events, Awareness Efforts
Third-Party Supply Out-source
VARs
Pre-Sales
Dealers
TeleSales/ TeleMktg
Sales
Internal Support - Install, Training Service
Group
Post-Sales
Full-Service
Responsive Support
References/ Credentials
Lowest Total Cost
Segment
Source Reprinted with permission of Rick
Wilson, Chicago Strategy Associates, ?2000.
13
TABLE 2-4 SHIPPING CHARGES FOR 150 PURCHASE OF
SHIRTS FROM LANDS END
Source www.landsend.com website.
14
 
FIGURE 2-2 ADVERTISING COPY FOR AN AD FOR BN.COM
Source advertisement for bn.com in Wall Street
Journal, November 20, 2002, p. A11.
15
TABLE 2-5 THE SERVICE OUTPUT DEMANDS (SOD)
TEMPLATE
INSTRUCTIONS If quantitative marketing-research
data are available to enter numerical ratings in
each cell, this should be done. If not, an
intuitive ranking can be imposed by noting for
each segment whether demand for the given service
output is high, medium, or low.
16
Chapter 3Supply Side Channel
AnalysisChannel Flows and Efficiency Analysis
17
FIGURE 3-1 MARKETING FLOWS IN CHANNELS
Physical Physical Physical Posses
sion Possession Possession Ownership Ownershi
p Ownership Promotion Promotion Promotion
Negotiation Negotiation Negotiation Consume
rs Producers Wholesalers Retailers Industrial
Financing Financing Financing and House
hold Risking Risking Risking Ordering Or
dering Ordering Payment Payment Payment
Commercial Channel Subsystem
The arrows above show flows of activity in the
channel (e.g. physical possession flows from
producers to wholesalers to retailers to
consumers). Each flow carries a cost. Some
examples of costs of various flows are given
below

18
TABLE 3-1 CDWS PARTICIPATION IN VARIOUS CHANNEL
FLOWS
19
TABLE 3-2 PRODUCT RETURNS A LARGE-SCALE PROBLEM
Furthermore, returns are very significant in many
industries. In a survey of over 300 reverse
logistics managers in 1998, researchers found the
following ranges for return percentages
TABLE 3-3 PRODUCT RETURNS PERCENTAGE RANGES
20
TABLE 3-4 DIFFERENCES BETWEEN FORWARD AND
REVERSE LOGISTICS
21
FIGURE 3-2 POSSIBLE PATHWAYS FOR RETURNED
PRODUCT
Key solid lines denote product to be salvaged
for subsequent revenue. Dotted lines denote
non-revenue-producing product flows.
22
FIGURE 3-3 THE EFFICIENCY TEMPLATE
Entries in column must add up to 100 points.
Entries across row (sum of proportional flow
performance of channel members 1 through 4) for
each channel member must add up to 100
points. Normative profit share of channel
member i is calculated as (final weight,
physical possession)(channel member i's
proportional flow performance of physical
possession) (final weight,
payment)(channel member i's proportional flow
performance of payment). Entries across row (sum
of normative profit shares for channel members 1
through 4) must add up to 100 points.
23
FIGURE 3-4 THE BULLWHIP EFFECT
Source Based on the lecture notes of Enver
Yücesan at INSEAD.
24
TABLE 3.APP3A-1 BUILDING MATERIALS COMPANY
EFFICIENCY TEMPLATE FOR CHANNEL SERVING END-USERS
THROUGH RETAILIERS UNDISGUISED DATA
25
TABLE 3.APP3A-2 BUILDING MATERIALS COMPANY
EFFICIENCY TEMPLATE FOR CHANNEL SERVING END-USERS
THROUGH RETAILERS RANK-ORDER DATA
26
TABLE 3.APP3A-3 BUILDING MATERIALS COMPANY
EFFICIENCY TEMPLATE FOR CHANNEL SERVING END-USERS
THROUGH RETAILERS TRANSFORMED RANK-ORDER DATA