2 Market Variables 8 The target market’s needs and wants Objective 1:8The target market’s needs and wantsshould drive the manner inwhich the channel manager shapes the designof the firm’s marketing channels.
3 Framework for Market Analysis Objective 2:8Framework for Market AnalysisMarketgeographyMarketbehaviorMarketsizeMarketdensityTargetMarkets
4 Market Geography Channel manager’s task: 8 Objective 3:Market Geography8Market geography refers to the geographicalextent of markets and where they are located.Channel manager’s task:To evaluate market geography relativeto channel structure to ensure thatthe structure is able to serve the marketseffectively and efficiently.
5 Locating Markets 8 Channel manager delineates geographical locations of target markets by using acombination of the following:The Bureau of Censusdata for geographical entities such asstates, regions/divisions, counties,metropolitan statistical areas, towns &townships2. Postal ZIP codes
6 Tracking Changes in Market Geography 8In the U.S.GloballyA high degree of mobility within the U.S. means that market geography changes frequently.Southeast Asian countries & former Eastern bloc countries of central & eastern Europe have become key locations.
7 Market Size Channel manager’s task: 8 Objective 4:8Market size refers to the number of buyers or potential buyers (consumer or industrial) in a given market.Channel manager’s task:When using Bucklin’s model formarket size data, it is important also to consider the peculiarities of particular situations and other relevant variables.
8 Market Density 8 Market density refers to the number of Objective 5:8Market density refers to the number ofbuyers or potential buyers per unit ofgeographical area.This market dimension’srelationship to channel structureis illustrated in the concept ofefficient congestion.
9 Market Density & Channel Strategy 8Efficient congestionCongested (high-density)markets can promoteefficiency in the performance ofseveral basic distribution tasks,particularly those of transportation,storage, communication, andnegotiation.
10 Market Density & Channel Strategy 8The opportunity to achieve ahigh level of customer access atlow cost is higher in dense marketsthan in more dispersed ones.StrategicImplication=Manufacturers of a wide array of productsseek out distributors and retailers thatoperate in dense markets.
11 Market behavior consists of four Objective 6:Market Behavior8Market behavior consists of foursubdimensions:When the market buysWhere the market buysHow the market buysWho buys
12 When the Market Buys Implications for the channel manager: 8 Variations occur:SeasonallyWeeklyDailyImplications for the channel manager:Variations create peaks & valleys in the manufacturer’s production schedule.He or she should attempt to select channel members who are in tune with these changing patterns.
13 Where the Market Buys Implications for the channel manager: 8 Determined by:The types of outlets from which finalbuyers choose to make their purchases2. The location of those outletsImplications for the channel manager:1. He or she should know where customers generallybuy particular types of productsHe or she should know whether these patternsmay be changing.
14 How the Market Buys Versus 8 Large quantities Self-service One-stop shoppingImpulse buying5. Cash6. Shopping at home7. Expending substantial effort through comparison shopping8. Demanding extensive serviceSmall quantitiesAssistance by salespeopleBuying from several storesExtensive decision making prior to purchaseCreditShopping at storesExpending little effort8. Demanding little serviceVersus
15 Who Buys 8 Who makes the physical purchase? May influence the kinds of channel members used toserve industrial marketsAffects the type ofretailers chosen inthe consumer marketWho decides to make the purchase?In context of family unitat consumer levelBuying centers atindustrial level
16 Buying Centers 8 Sets of people who participate in industrial buying decisions and who are responsible forthe consequences resulting from the decisionUsersInfluencersDecidersApproversBuyersGatekeepers
17 Changes in Market Behavior Objective 8:8Changes in Market BehaviorMust be tuned into changes thatare likely to occurNeeds to determinewhether changesare temporary orlong termChannelManager’sRole
18 Implications of Changes 8Good personalselling atthe retaillevelMaking a comeback in departmentand specialty store sectors due toincreasing consumer demand forknowledgeable and helpfulsalespeople
19 Implications of Change 8Retail stores withspartan surroundings &minimum service butvery low pricesConsumers demanding membership in warehouseclubs (Sam’s Club)
20 Implications of Change 8Mail-order buyingShoppers are trying to save time and avoidthe inconvenience of shopping at crowded stores and fighting traffic congestion
21 Implications of Change 8Online shoppingPersonal computers are a means for consumersto supplement their in-store shopping
22 Implications of Change 8Auto retailing &foreign automanufacturersCar buyers demanding fewer hassles &confrontations typically common when buying a car
23 Implications of Change 8Internet ShoppingGrowing in all sectors, especially inindustrial or B2B
24 Implications of Change 8Innovationsundertaken bychannel memberKohl’s racetrack layout exposes customersto the maximum amount of merchandisein the shortest time.