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©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Presentation on theme: "©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part."— Presentation transcript:

1 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. CHAPTER 9 Motivating the Channel Members Part 3: Managing the Marketing Channel

2 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives Channel management Channel management versus channel design Motivating channel members Channel member needs and problems Supporting channel members Relationship differences The selective use of power Limited control 2

3 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective Channel Management 1 The administration of existing channels to secure the cooperation of channel members in achieving the firms distribution objectives.

4 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Motivation Management The actions taken by the manufacturers to foster channel member cooperation in implementing the manufacturers distribution objectives. The actions taken by the manufacturers to foster channel member cooperation in implementing the manufacturers distribution objectives.

5 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective Channel Management versus Channel Design Setting up the channel Channel DesignChannel Management Running the channel 2

6 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective Motivating Channel Members Basic Framework: 1.Find out the needs and problems of channel members. 2.Offer support to the channel members that is consistent with their needs and problems. 3.Provide leadership through the effective use of power. 3

7 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective Channel Member Needs & Problems Research studies of channel members Research studies by outside parties Marketing channel audits Distributor advisory councils 4 Approaches for learning about member needs & problems: Approaches for learning about member needs & problems:

8 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Research Studies of Channel Members BUT, …manufacturer-initiated research can be useful because certain types of needs or problems may not be at all obvious. Less than 1 percent of manufacturers research budgets is spent on channel member research! Less than 1 percent of manufacturers research budgets is spent on channel member research!

9 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Research Studies by Outside Parties Why use outside parties to conduct research? They provide a higher assurance of objectivity. They provide a level of expertise that the manufacturer may not Possess.

10 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Channel Audits Gather data on how channel members perceive the manufacturers marketing program and its component parts. Locate the strengths and weaknesses in the relationships. Learn what is expected of manufacturers to make the channel relationship viable and optimal. Focus of Channel Managers Approach:

11 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Channel Audits What makes marketing channel audits most effective? It should identify and define in detail the issues relevant to the Manufacturer-wholesaler and/or Manufacturer-retailer relationship. Issues chosen for the audit should be cross-referenced to any relevant variables. It must be conducted periodically so as to capture trends & patterns.

12 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Distributor Advisory Councils Who is involved? Top management representatives from the manufacturer and from the channel members What are the benefits? Provides recognition for the channel members Provides a vehicle for identifying and discussing mutual needs and problems Results in an overall improvement of channel communications

13 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective Supporting Channel Members 5 3 Types Of Programs 3 Types Of Programs 1. Cooperative 3.Distribution programming 3.Distribution programming 2.Partnership or Strategic alliance 2.Partnership or Strategic alliance

14 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cooperative Arrangements Focuses on channel member needs & problems Simple and straightforward Conveys a clear sense of mutual benefit

15 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Cooperative Arrangements Cooperative advertising allowances Payments for interior displays Contests for buyers, salespeople, etc. Allowances for warehousing functions Payments for window display space Detail men who check inventory Demonstrators Coupon-handling allowance Free goods Typical types of cooperative programs provided by manufacturers to channel members

16 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Partnerships & Strategic Alliances Focus on a continuing and mutually supportive relationship between the manufacturer and its channel members in an effort to provide a more highly motivated team, network, or alliance of channel members

17 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Partnerships & Strategic Alliances 1.Manufacturer should make explicit statement of policies in areas such as product availability, technical support, pricing, etc. 2.Manufacturer should assess all existing distributors as to their capabilities for fulfilling their roles 3. Manufacturer should continually appraise the appropriateness of the policies guiding his or her relationship with the channel members

18 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Distribution Programming A comprehensive set of policies for the promotion of a product through the channel Developed as a joint effort between the manufacturer and the channel members to incorporate the needs of both

19 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Distribution Programming Steps for developing a program: 1.Manufacturer develops analysis of marketing objectives & the kinds of levels of support needed from channel members Ascertains channel members needs & problem areas 2.Formulate specific channel policies that offer: Price concessions to channel members Financial advice Some kind of protection for channel members

20 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective Relationship Differences Cooperative Arrangements: Intermittent interactions between manufacturer & channel members Partnerships & Strategic Alliances: Continuing & mutually supportive relationship Distribution Programming: Deals with virtually all aspects of the channel relationship 6

21 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective The Selective Use of Power The channel manager must exercise effective leadership on a continuing basis to attain a well-motivated team of members. 7

22 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objective Interorganizational System Loosely arranged firms = few advantages from central direction Reward & penalty system not precise Overall planning uncoordinated Diffused perspective necessary to maximize total system effort Limited Control 8

23 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question #2 The ubiquitous Bic razors, cigarette lighters, and, of course, ballpoint pens are sold by more than 100,000 supermarkets, drugstores, and other mass merchandisers in the United States. Bic Corporation has traditionally relied on large numbers of mass marketers to sell these products. Can Bic Corporation be partners with each of the 100,000 retailers selling these products? Explain why or why not?

24 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question #7 FilmDistrict, a newly-formed film studio and distributor worked out a deal with Netflix, Inc. to stream new movies over the Internet just a few months after they are released on DVDs. Under the terms of the agreement, new movies from FilmDistrict will be licensed exclusively to Netflix instead of appearing on premium cable channels. Industry observers believe this deal reflects the new realities of changing channels for movies from theaters, home videos, and cable pay TV to online streaming. Netflix also has a similar deal with Relativity Media, the movie company that financed the highly-acclaimed boxing movie, The Fighter. Given the rapid and dramatic changes occurring in film distribution channels, how might partnerships or alliances such as that between Netflix and FilmDistrict be helpful to either firm in managing their distribution channels?


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